<PAGE>
 
===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-Q

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED   March 31, 1999.

[ ]  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:  0-28420
                                                -------


                               Integ Incorporated
                               ------------------
             (Exact name of registrant as specified in its charter)


           Minnesota                                      41-1670176
           ---------                                      ----------
     (State of Incorporation)               (I.R.S. Employer Identification No.)

      2800 Patton Road, St. Paul, MN                         55113
      -------------------------------                     ------------
 (Address of principal executive offices)                  (Zip Code)


                       Telephone Number:  (651) 639-8816
                       ---------------------------------
              (Registrant's telephone number, including area code)



Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.   Yes   X      No ______

As of May 10, 1999, the registrant had 9,657,284 shares of $.01 par value common
stock issued and outstanding.


=============================================================================== 
<PAGE>
 
                              INTEG INCORPORATED

                                   INDEX
                                   -----



PART I.   FINANCIAL INFORMATION                                          Page
                                                                         ----

 Item 1.  Financial Statements

          Balance Sheets as of March 31, 1999 and December 31, 1998        3
 
          Statements of Operations for the three months
          ended March 31, 1999 and 1998 and for the period from
          April 3, 1990 (inception) through March 31, 1999                 4
 
          Statements of Cash Flows for the three months
          ended March 31, 1999 and 1998 and for the period from
          April 3, 1990 (inception) through March 31, 1999                 5
 
          Notes to Financial Statements                                    6
 
 Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of Operations                    7
 
 Item 3.  Quantitative and Qualitative Disclosures About Market Risk      11
 

PART II.  OTHER INFORMATION

 Item 2.  Changes in Securities (Use of proceeds from public offering)    11

 Item 6.  Exhibits and Reports on Form 8-K                                12


SIGNATURES                                                                13

                                       2
<PAGE>
 
                              Integ Incorporated
                         (A Development Stage Company)
                                 Balance Sheets


<TABLE>
<CAPTION>
                                                     March 31         December 31
                                                       1999               1998
                                                  --------------     --------------
                                                    (unaudited)
<S>                                               <C>               <C>
Assets
------
Current assets:
   Cash and cash equivalents                        $  9,086,226      $  11,175,695
   Receivables                                                -                  -
   Prepaid expenses                                      108,757            132,229
                                                  --------------     --------------
Total current assets                                   9,194,983         11,307,924
                                                  --------------     --------------

Furniture and equipment                                9,543,803          9,538,478
Less accumulated depreciation                         (2,989,948)        (2,715,684)
                                                  --------------     --------------
                                                       6,553,855          6,822,794

Other assets                                              20,057             23,883
                                                  --------------     --------------
Total assets                                        $ 15,768,895      $  18,154,601
                                                  ==============     ==============



Liabilities and shareholders' equity
------------------------------------
Current liabilities:
   Accounts payable and accrued expenses            $    852,810      $   1,013,581
   Current portion of capital lease obligations          112,507            145,761
   Current portion of long-term debt                   1,402,701          1,251,247
                                                  --------------     --------------
Total current liabilities                              2,368,018          2,410,589
                                                  --------------     --------------

Long-term liabilities:
  Capital lease obligations, less current 
   maturities                                              6,137             14,178
  Long-term debt, less current maturities              2,230,784          2,672,018
                                                  --------------     --------------
Total long-term liabilities                            2,236,921          2,686,196
                                                  --------------     --------------

Shareholders' equity:
   Common stock                                           96,566             95,807
   Additional paid-in capital                         54,710,855         54,616,721
   Deficit accumulated during the development 
    stage                                            (43,523,593)       (41,524,253)
                                                  --------------     --------------
                                                      11,283,828         13,188,275
   Deferred compensation                                (119,872)          (130,459)
                                                  --------------     --------------
Total shareholders' equity                            11,163,956         13,057,816
                                                  --------------     --------------
Total liabilities and shareholders' equity          $ 15,768,895      $  18,154,601
                                                  ==============     ==============
</TABLE>

                                       3
<PAGE>
 
                              Integ Incorporated
                         (A Development Stage Company)
                            Statement Of Operations
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                              
                                                               Period from 
                                  Three Months Ended          April 3, 1990
                                         March 31            (Inception) to
                             -----------------------------       March 31
                                  1999           1998              1999
                             -------------   -------------    --------------
<S>                         <C>              <C>              <C>
Operating expenses:
   Research and development     $  792,333     $ 1,705,902      $ 22,334,481
   Manufacturing development       589,850         680,272         7,758,126
   Clinical and regulatory         149,056         328,168         3,645,878
   General and administrative      377,588         498,443         8,893,620
   Sales and marketing              22,166          82,456         2,622,621
                             -------------   -------------    --------------
Operating loss                  (1,930,993)     (3,295,241)      (45,254,726)
                             -------------   -------------    --------------

Other income (expense):
   Interest income                 126,586         283,661         4,555,584
   Interest expense               (195,013)       (296,079)       (2,696,811)
   Other                                81           2,775          (127,639)
                             -------------   -------------    --------------
                                   (68,345)         (9,643)        1,731,135
                             -------------   -------------    --------------

Net loss for the period and
 deficit accumulated during
 the development stage        $ (1,999,338)   $ (3,304,884)    $ (43,523,591)
                             =============   =============    ==============


Net loss per share:
    Basic and diluted         $      (0.21)   $      (0.35)    $      (14.13)
                             =============   =============    ==============

Weighted average number of
common shares outstanding:
    Basic and diluted            9,616,974       9,398,753         3,080,125
                             =============   =============    ==============

</TABLE>

                                       4
<PAGE>
 
<TABLE>
<CAPTION>

                                                                                    Period from
                                                          Three Months Ended       April 3, 1990
                                                               March 31            (Inception) to
                                                    ----------------------------    December 31,
                                                        1999            1998           1998
                                                    ----------------------------    ------------
<S>                                                 <C>             <C>             <C>
OPERATING ACTIVITIES:
    Net loss                                        $ (1,999,338)   $ (3,304,884)   $(43,523,591)
    Adjustments to reconcile net loss to cash
       used in operating activities:
    Depreciation                                         274,265         256,174       3,026,780
    Deferred compensation amortization                    10,587          29,804       1,101,307
    Amortization of loan commitment fee                     --           100,615         250,074
    Stock grants in lieu of compensation                  94,893            --            94,893
    Loss (gain) on sale of equipment,deposit and
       bad debt write-off                                   --              --            95,645
    Value of options and warrants related to debt
       financing, lease guarantee, extension of
       options and consulting services                     3,826           4,626         374,962
    Changes in operating assets and liabilities:
       Receivables                                          --              --           (28,829)
       Prepaid expenses and other assets                  23,472          (5,619)        255,997
       Accounts payable and accrued expenses            (160,774)       (168,367)        852,807
                                                    ------------    ------------    ------------
Net cash used in operating activities                 (1,753,069)     (3,087,651)    (37,499,955)
                                                    ------------    ------------    ------------

INVESTING ACTIVITIES:
    Purchase of furniture and equipment                   (5,325)       (169,809)     (8,875,352)
    Proceeds from sale of furniture and equipment           --              --            47,940
                                                    ------------    ------------    ------------
Net cash used in investing activities                     (5,325)       (169,809)     (8,827,412)
                                                    ------------    ------------    ------------

FINANCING ACTIVITIES:
    Proceeds from sale of Convertible
       Preferred Stock                                      --              --        22,789,732
    Proceeds from bridge loan debt                          --              --         2,900,000
    Proceeds from borrowings under loan
       agreement                                            --           754,989       5,486,446
    Payments on long-term debt                           (41,295)       (184,712)     (1,457,160)
    Payments on capital lease obligations               (289,780)        (37,623)       (823,906)
    Proceeds from sale of common stock                      --            77,512      26,518,481
                                                    ------------    ------------    ------------
Cash provided (used) by financing activities            (331,075)        610,166      55,413,593
                                                    ------------    ------------    ------------

Increase (decrease) in cash and cash equivalents      (2,089,469)     (2,647,294)      9,086,226

Cash and cash equivalents at beginning of period      11,175,695      21,776,757            --
                                                    ------------    ------------    ------------
                                                                   
Cash and cash equivalents at end of period          $  9,086,226    $ 19,129,463    $  9,086,226
                                                    ============    ============    ============

</TABLE>

                                       5
<PAGE>
 
                               INTEG INCORPORATED
                         (A Development Stage Company)
                         Notes To Financial Statements
                                  (unaudited)

(1)   Basis of Presentation

The accompanying financial statements, which are unaudited except for the
balance sheet as of December 31, 1998, have been prepared in accordance with
instructions to Form 10-Q and do not include all the information and notes
required by Generally Accepted Accounting Principles for complete financial
statements.  In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.  These financial statements should be read in conjunction with the
financial statements and accompanying notes from the Company's Annual Report on
Form 10-K for the year ended December 31, 1998 filed with the Securities and
Exchange Commission.

(2)   Net Loss Per Share

Net loss per share is computed using the weighted average number of shares of
common stock outstanding during the periods presented.  In 1997, the Financial
Accounting Standards Board issued Statement No. 128, Earnings per Share.
Statement 128 replaced the calculation of primary and fully diluted earnings per
share with basic and diluted earnings per share.  Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities.  Diluted earnings per share is very similar
to the previously reported fully diluted earnings per share.  All earnings per
share amounts for all periods have been presented, and where appropriate,
restated to conform to the Statement 128 requirements.

(3)   Equipment Loan Agreement

During 1996, the Company entered into an equipment loan agreement, which
provides for borrowings up to $12.5 million to finance the purchase of equipment
and fixtures including automated manufacturing equipment and tooling.  Loans are
paid back monthly over a four-year period.  The obligation of the lender to make
additional loans expired December 31, 1998.  The Company borrowed a total of
$5.5 million under the agreement.

                                       6
<PAGE>
 
Item 2.
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

Cautionary Statement

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.  When used in
this Form 10-Q and in future filings by the Company with the Securities and
Exchange Commission, in the Company's press releases and in oral statements made
with the approval of an authorized executive officer, the words or phrases
"believes," "anticipates," "expects," "intends," "will likely result,"
"estimates," "projects" or similar expressions are intended to identify such
forward-looking statements, but are not the exclusive means of identifying such
statements.  These forward-looking statements involve risks and uncertainties
that may cause the Company's actual results to differ materially from the
results discussed in the forward-looking statements.  Factors that might cause
such differences include, but are not limited to, the following: risks
associated with the development of a new technology; dependence on the LifeGuide
System, which is still under development; uncertainty of market acceptance;
risks associated with the Company's ability to successfully develop a commercial
product; history of operating losses and expectation of future losses; risks
associated with the corporate alliance; requirement of additional capital prior
to commercial introduction of the LifeGuide System; limited clinical testing
experience; uncertainty of obtaining Food and Drug Administration clearances or
approvals; heightened competition; risks associated with the lack of
manufacturing capability and dependence on suppliers;  risks associated with the
company's dependence on proprietary technology, including those related to
adequacy of patent and trade secret protection; risks associated with retaining
key personnel and attracting additional qualified skilled personnel; and the
risks associated with product liability and limited insurance coverage.

The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made.  The Company
undertakes no obligation to revise any forward-looking statements in order to
reflect events or circumstances after the date of such statements.  Readers are
urged to carefully review and consider the various disclosures made by the
Company in this report and in the Company's other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect the Company's business.  Such forward-
looking statements are qualified in their entirety by the cautions and risk
factors set forth under "Cautionary Statement" filed as Exhibit 99.1 to this
Quarterly Report on Form 10-Q.


General

Integ, a development stage company, was incorporated on April 3, 1990 to develop
the LifeGuide System, a next generation, hand-held glucose monitoring product
for use by people with diabetes that avoids the pain and blood associated with
conventional "finger-stick" technologies.  Utilizing the Company's proprietary
interstitial fluid sampling technology, the LifeGuide System will allow people
with diabetes to frequently self-monitor their glucose levels without repeatedly
enduring the pain of lancing their fingers to obtain a blood sample.

                                       7
<PAGE>
 
From inception through March 31, 1999, the Company has incurred losses totaling
$43.5 million, consisting of $22.3 million of research and development expenses,
$8.9 million of general and administrative expenses, $7.8 million of
manufacturing development expenses and $4.5 million of other expenses net of
interest income.  The Company's activities have consisted primarily of research
and product development, product design, and development of the manufacturing
equipment and processes and marketing strategies needed for the introduction of
the LifeGuide System.  The Company has generated no revenue and has sustained
significant operating losses each year since inception.  The Company expects
such losses to continue for the next several years.

Based on the results of a large-scale internal study, the Company announced in
August 1998 that it would be replacing the LifeGuide infrared measurement system
with an alternate proven measurement technology.  Furthermore, the Company
announced that it would explore potential corporate alliances that could
expedite this change.  As a result of this decision, the Company restructured in
August 1998 to reduce the cash burn rate.

On April 5, 1999 the Company announced that it had entered into a strategic
alliance with Amira Medical to jointly develop a new generation of home glucose
monitoring tests utilizing interstitial fluid (ISF).  Under the alliance,
products to be developed will combine Integ's ISF collection technology with the
Amira's glucose measurement technologies.  Both companies will contribute
resources to the products' development, which will be manufactured by the
Company and commercialized by Amira.

As part of the strategic alliance agreement, the Company will have the option at
a future date, to merge with Amira, subject to certain conditions.  The complete
terms of the agreement are available as an exhibit to the Integ Current Report
on Form 8-K filed with the Securities and Exchange Commission on April 9, 1999.

The Company's future success is entirely dependent upon the successful
development, commercialization and market acceptance of the LifeGuide System,
the development of which is ongoing and the complete efficacy of which has not
yet been demonstrated.  The Company is currently focused on the research and
development activities necessary to complete the LifeGuide System in order to
meet the product specifications and initiate clinical trials.

Results of Operations

Comparison of Three Months Ended March 31, 1999 and 1998

General:  The Company's net loss totaled $2.0 million for the three months ended
March 31, 1999, as compared to $3.3 million for the same period in 1998.  The
Company expects net losses to continue for the next several years.

Research and development expenses:  Research and development expenses decreased
to $792,000 during the three months ended March 31, 1999 from $1,706,000 during
the same period in 1998.  This decrease was primarily attributable to decreased
staffing costs ($251,000), decreased pilot plant allocation costs ($279,000),
decreased consulting expenses ($205,000), recruitment costs ($56,000), prototype
expenses ($55,000), lab supply expense ($11,000) as well as a decrease in other
expenses ($57,000).

                                       8
<PAGE>
 
Manufacturing development expenses: Manufacturing development expenses decreased
to $578,000 during the three months ended March 31, 1999 from $680,000 during
the same period in 1998. The decrease in manufacturing development expenses is
primarily attributable to decreased staffing costs ($42,000), decreased
prototype tooling expenses ($251,000), depreciation expense ($32,000), travel
costs ($22,000), consulting expenses ($16,000) as well as other expenses
($18,000). These decreases were partially offset by a reduction in pilot plant
costs allocated to research and development ($279,000).

Clinical and regulatory expenses:  Clinical and regulatory expenses decreased to
$149,000 during the three months ended March 31, 1999 from $328,000 during the
same period in 1998.  This decrease is primarily attributable to decreased
staffing costs ($151,000), consulting expenses ($13,000), recruitment costs
($10,000) as well as decreased outside calibration costs ($5,000).

General and administrative expenses:  General and administrative expenses
decreased to $378,000 during the three months ended March 31, 1999 from $498,000
during the same period in 1998. This decrease is primarily attributable to
decreased staffing costs ($155,000).  This decrease was partially offset by
increases in consulting expenses ($13,000) as well as recruiting expenses
($17,000).

Sales and marketing expenses:  Sales and marketing expenses decreased to $22,000
during the three months ended March 31, 1999 from $82,000 during the same period
in 1998.  This decrease was entirely the result of decreased staffing costs
($60,000).

Interest income:  Interest income decreased to $127,000 during the three month
period ended March 31, 1999, from $284,000 during the same period in 1998.  The
decrease resulted from lower average balances of cash and cash equivalents.

Interest expense:  Interest expense decreased to $195,000 during the three month
period ended March 31, 1999, from $296,000 during the same period in 1998.  The
decrease in interest expense is attributable to payments made on long-term debt
and capital leases. On March 31, 1999, the Company's long term liabilities,
including current portions, were $3,752,129 as compared to $4,496,172 on March
31, 1998.

Liquidity and Capital Resources

The Company's operations since inception have been funded by net proceeds from
the sale of Common and Preferred Stock totaling approximately $52 million and
proceeds from borrowing under an equipment loan agreement totaling approximately
$5.5 million.  As of March 31, 1999, the Company had cash and cash equivalents
of approximately $9.1 million and working capital of $6.8 million.

The Company believes that its current cash balances will be sufficient to fund
its operations until sometime in mid 2000. The Company's future liquidity and
capital requirements will depend on numerous factors, including the success of
its strategic alliance with Amira, when or if the performance of the LifeGuide
System meets the required performance specifications, the extent to which the
Company's LifeGuide System gains market acceptance, the timing of regulatory
actions regarding the LifeGuide System, manufacturing activities, the results of
clinical trials and competition.  See Exhibit 99.1 to this Form 10-Q for a more
detailed description of the factors that may affect the Company's future
liquidity and capital requirements.

                                       9
<PAGE>
 
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and non-IT Systems

  The Year 2000 Issue is the result of computer programs that were written using
two digits rather than four to define the applicable year.  Any of the Company's
computer programs or hardware that have date-sensitive software or embedded
chips may recognize a date using "00" as the year 1900 rather than the year
2000.  This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.

  The Company's plan to resolve the Year 2000 Issue involves the following four
phases: assessment, remediation, testing, and implementation. To date, the
Company has completed the assessment of all of its systems that could be
significantly affected by the Year 2000 Issue. The assessments indicated that
the information systems needed only a minor upgrade to the operating software to
be compliant; the telephone system needed upgrading; and the shipping computer
application needed upgrading.

  The Company has completed the remediation phase for its information systems.
Testing and implementation is underway and will be complete by June 30, 1999.
The shipping computer application is complete through testing and
implementation. The remaining issue is the telephone system, which is in the
remediation phase pending the installation of software and hardware upgrades.
The telephone upgrade installation is expected to be completed in August with
testing and full implementation by September 30, 1999.

  The Company is in the process of gathering information about the Year 2000
compliance status of its significant suppliers and subcontractors (external
agents). This assessment will be completed during the second quarter.  The
inability of external agents to complete their Year 2000 resolution process in a
timely fashion could materially impact the Company.  The potential effect on the
Company of non-compliance by external agents has not yet been determined.

  The Company will utilize both internal and external resources to reprogram or
replace, test and implement its software and operating equipment for Year 2000
modifications.  The total cost of the Year 2000 project has not yet been
determined.  To date, the Company has incurred approximately $5,000 in expenses
related to the Year 2000 project, and expects to incur, approximately, an
additional $15,000 in 1999 to complete all upgrades.  All Year 2000 related
expenses are being funded through operations.

  Management of the Company believes it has an effective program in place to
resolve the Year 2000 issue in a timely manner.  As noted above, the Company has
not yet completed all necessary phases of its Year 2000 program.  In the event
that the Company does not complete any additional phases, the Company's research
and development and clinical activities would be disrupted and delayed after
January 1, 2000.  In addition, disruptions in the economy generally resulting
from Year 2000 issues could also materially adversely affect the Company.

  The Company currently has no contingency plans in place in the event it does
not complete all phases of its Year 2000 program.  The Company plans to evaluate
the status of its efforts in June 1999 to determine whether such a plan is
necessary.

                                       10
<PAGE>
 
Item 3.

           Quantitative and Qualitative Disclosures About Market Risk

The Company has no derivative financial instruments or derivative commodity
instruments in its cash and cash equivalents investments.  The Company's cash
and cash equivalents are invested in highly liquid vehicles, including money
market accounts and high-grade commercial paper as guided by the company's
investment policy.  As a result of the Company's investment policy, a decrease
in the interest rate earned would not be material to the Company's results.  All
of the Company's transactions are conducted in US dollars.  Accordingly, the
Company is not exposed to foreign currency risk.


                             II.  OTHER INFORMATION

Item 2:  Changes in Securities (Use of proceeds from public offering)

The net offering proceeds to the Company from its initial public offering in
1996, after deducting expenses, were approximately $26.1 million.  The Company
has used the net offering proceeds to the Company for the following purposes in
the approximate amounts set forth below:

 
       Investment in short-term, interest bearing securities;
         primarily investment grade commercial paper             $9,035,000
         and money market funds
       Capital expenditures                                       2,335,000
       Research and development and clinical and regulatory
         preparation                                              8,940,000
       Manufacturing scale-up and marketing activities            3,870,000
       Working capital and other general corporate purposes       1,920,000
                                                                -----------
             Total use of proceeds                              $26,100,000
                                                                -----------


Except for officer compensation and relocation payments totaling $1,572,509 in
the aggregate, director compensation totaling $202,500 in the aggregate, and
consulting fees paid to a director totaling $131,625, none of such payments were
paid directly or indirectly to (i) officers or directors of the Company or their
affiliates, (ii) persons owning 10% or more of the Company's equity securities
or (iii) affiliates of the Company.

                                       11
<PAGE>
 
Item 6.  Exhibits and Reports on Form 8-K


       (a)  Exhibits filed herewith.

           3.1  Amended and Restated Articles of Incorporation of the Company
                (incorporated by reference to Exhibit 3.2 to the Company's
                Registration Statement on Form S-1 (SEC File No. 333-4352)).

           3.2  Amended Bylaws of the Company (incorporated by reference to
                Exhibit 3.3 to the Company's Registration Statement of Form S-1
                (SEC File No. 333-4352)).

          27    Financial Data Schedule.

          99.1  Cautionary Statement.

       (b)  No reports on Form 8-K were filed during the quarter ended March 
            31, 1999.

                                       12
<PAGE>
 
                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                               INTEG INCORPORATED
                                  (Registrant)



Date:  May 14, 1999               By:    /s/ Susan L. Critzer
                                         --------------------
                                         Susan L. Critzer
                                         President and Chief Executive Officer
                                         Interim Chief Financial Officer
                                         (principal executive officer, principal
                                         financial and accounting officer)

                                       13
<PAGE>
 
                                EXHIBIT INDEX


Exhibit     Description
-------     -----------
 
27.         Financial Data Schedule (Electronically Filed).

99.1        Cautionary Statement.