<PAGE>   1
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, C.C.  20549

                                   FORM 10-Q

[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE PERIOD ENDED FEBRUARY 29, 2000
                                       OR
[   ]  TRANSITION REPORT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE TRANSITION PERIOD FROM             TO
                               -----------    ------------
                         COMMISSION FILE NUMBER 0-24050

                          NORTHFIELD LABORATORIES INC.
             (Exact name of registrant as specified in its charter)

                    DELAWARE                                    36-3378733
          (State or other jurisdiction                       (I.R.S. Employer
         of incorporation or organization)                Identification Number)

1560 SHERMAN AVENUE, SUITE 1000, EVANSTON, ILLINOIS             60201-4800
     (Address of principal executive offices)                    (Zip Code)



REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:   (847) 864-3500

FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT: NOT APPLICABLE

          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
                       ---                                    ---

                APPLICABLE ONLY TO ISSUER INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

          INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS
AND REPORTS REQUIRED TO BE FILED BY SECTION 12, 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT.     YES                  NO
                              ---                 ---

    AS OF FEBRUARY 29, 2000, REGISTRANT HAD 14,242,375 SHARES OF COMMON STOCK
                                  OUTSTANDING

================================================================================
<PAGE>   2











                          NORTHFIELD LABORATORIES INC.
                      (a company in the development stage)

                              Financial Statements

                                February 29, 2000

                    (See accompanying Review Report of KPMG)


<PAGE>   3










                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT



     The Board of Directors
     Northfield Laboratories Inc.:


     We have reviewed the balance sheet of Northfield Laboratories Inc. (a
     company in the development stage) as of February 29, 2000, and the related
     statements of operations for the three-month period ended February 29, 2000
     and February 28, 1999 and statements of operations and cash flows for the
     nine-month period ended February 29, 2000 and February 28, 1999 and for the
     period from June 19, 1985 (inception) through February 29, 2000. We have
     also reviewed the statements of shareholders' equity (deficit) for the
     nine-month period ended February 29, 2000 and for the period from June 19,
     1985 (inception) through February 29, 2000. These financial statements are
     the responsibility of the Company's management.

     We conducted our review in accordance with standards established by the
     American Institute of Certified Public Accountants. A review of interim
     financial information consists principally of applying analytical
     procedures to financial data and making inquiries of persons responsible
     for financial and accounting matters. It is substantially less in scope
     than an audit conducted in accordance with generally accepted auditing
     standards, the objective of which is the expression of an opinion regarding
     the financial statements taken as a whole. Accordingly, we do not express
     such an opinion.

     Based on our review, we are not aware of any material modifications that
     should be made to the financial statements referred to above for them to be
     in conformity with generally accepted accounting principles.

     We have previously audited, in accordance with generally accepted auditing
     standards, the balance sheet of Northfield Laboratories Inc. as of May 31,
     1999, and the related statements of operations, shareholders' equity
     (deficit), and cash flows for the year then ended and for the period from
     June 19, 1985 (inception) through May 31, 1999 (not presented herein); and
     in our report dated July 2, 1999, we expressed an unqualified opinion on
     those financial statements. In our opinion, the information set forth in
     the accompanying balance sheet as of May 31, 1999 and in the accompanying
     statement of shareholders' equity (deficit) is fairly stated, in all
     material respects, in relation to the statement from which it has been
     derived.



     /s/ KPMG


     March 27, 2000


<PAGE>   4

                          NORTHFIELD LABORATORIES INC.
                      (a company in the development stage)

                                 Balance Sheets

                 February 29, 2000 (unaudited) and May 31, 1999

<TABLE>
<CAPTION>

                                                                    February 29,        May 31,
                                                                       2000                1999
                                                                   -------------       ----------
 <S>                                                                <C>                 <C>
                                     Assets

Current assets:
 Cash                                                              $  29,586,123       25,855,668
 Short-term marketable securities                                     11,065,441       21,705,449
 Prepaid expenses                                                        107,276          302,240
 Other current assets                                                    329,556          268,430
                                                                   -------------       ----------
     Total current assets                                             41,088,396       48,131,787

Property, plant, and equipment, net                                    2,758,650        2,755,565
Other assets                                                              74,585           75,344
                                                                   -------------       ----------
                                                                   $  43,921,631       50,962,696
                                                                   =============       ==========
                      Liabilities and Shareholders' Equity

Current liabilities:
 Accounts payable                                                  $     971,259        1,325,030
 Accrued expenses                                                        111,908          120,624
 Accrued compensation and benefits                                       259,215          221,000
                                                                   -------------       ----------

     Total current liabilities                                         1,342,382        1,666,654

Other liabilities                                                        141,212          124,702
                                                                   -------------       ----------
     Total liabilities                                                 1,483,594        1,791,356
                                                                   -------------       ----------

Shareholders' equity:
 Preferred stock, $.01 par value.  Authorized 5,000,000 shares;
  none issued and outstanding                                               --               --
 Common stock, $.01 par value.  Authorized 30,000,000 shares;
  issued and outstanding 14,242,375 shares and 14,239,875 shares
  at February 29, 2000 and May 31, 1999, respectively                    142,424          142,399
 Additional paid-in capital                                          117,262,001      117,185,514
 Deficit accumulated during the development stage                    (74,966,388)     (68,156,573)
                                                                   -------------       ----------
     Total shareholders' equity                                       42,438,037       49,171,340
                                                                   -------------       ----------
                                                                   $  43,921,631       50,962,696
                                                                   =============       ==========
</TABLE>

See accompanying independent accountants' review report.



<PAGE>   5



                          NORTHFIELD LABORATORIES INC.
                      (a company in the development stage)

                            Statements of Operations

Three and nine months ended February 29, 2000 and February 28, 1999 and for
    the period from June 19, 1985 (inception) through February 29, 2000


<TABLE>
<CAPTION>

                                                                                               Cumulative
                                 Three months ended                 Nine months ended             from
                                 ------------------                 -----------------        June 19, 1985
                              February 29,    February 28,     February 29,   February 28,       through
                                  2000           1999             2000            1999      February 29, 2000
                              ------------    ------------     ------------   ------------  -----------------
                              (unaudited)     (unaudited)      (unaudited)    (unaudited)     (unaudited)
<S>                             <C>             <C>             <C>             <C>            <C>
Revenues - license income    $       -               -               -               -          3,000,000

Costs and expenses:
 Research and development       2,364,773       1,699,787       6,851,403       5,382,692      66,798,983
 General and administrative       657,759         597,612       1,666,064       1,748,630      30,876,789
                             ------------      ----------      ----------      ----------     -----------
                               (3,022,532)     (2,297,399)     (8,517,467)     (7,131,322)    (97,675,772)
                             ------------      ----------      ----------      ----------     -----------

Other income and expense:
 Interest income                  558,499         606,462       1,707,652       1,994,846      19,792,618
 Interest expense                    -               -               -               -             83,234
                             ------------      ----------      ----------      ----------     -----------

                                  558,499         606,462       1,707,652       1,994,846      19,709,384
                             ------------      ----------      ----------      ----------     -----------

    Net loss                 $ (2,464,033)     (1,690,937)     (6,809,815)     (5,136,476)    (74,966,388)
                             ============      ==========      ==========      ==========     ===========

Net loss per basic share     $      (0.17)          (0.12)          (0.48)          (0.36)          (8.44)
                             ============      ==========      ==========      ==========     ===========

Shares used in calculation
 of per share data             14,240,864      14,114,875      14,240,203      14,106,368       8,878,166
                             ============      ==========      ==========      ==========     ===========
</TABLE>


See accompanying independent accountants' review report.



<PAGE>   6
                          NORTHFIELD LABORATORIES INC.
                      (a company in the development stage)

                  Statements of Shareholders' Equity (Deficit)

                 Nine months ended February 29, 2000 and for the period from
         June 19, 1985 (inception) through February 29, 2000

<TABLE>
<CAPTION>

                                                                                                               Preferred stock
                                                                                                             -------------------
                                                                                                             Number    Aggregate
                                                                                                             of shares   amount
                                                                                                             -------------------

<S>                                                                                                          <C>          <C>
Issuance of common stock on August 27, 1985                                                                     -  $       -
Issuance of Series A convertible preferred stock at $4.00 per share on
 August 27, 1985 (net of costs of issuance of $79,150)                                                          -          -
Net loss                                                                                                        -          -
                                                                                                             --------    -------
Balance at May 31, 1986                                                                                         -          -
Net loss                                                                                                        -          -
Deferred compensation relating to grant of stock options                                                        -          -
Amortization of deferred compensation                                                                           -          -
                                                                                                             --------    -------

Balance at May 31, 1987                                                                                         -          -
Issuance of Series B convertible preferred stock at $35.68 per share on
 August 14, 1987 (net of costs of issuance of $75,450)                                                          -          -
Net loss                                                                                                        -          -
Amortization of deferred compensation                                                                           -          -
                                                                                                             --------    -------

Balance at May 31, 1988                                                                                         -          -
Issuance of common stock at $24.21 per share on June 7, 1988 (net of costs of issuance of $246,000)             -          -
Conversion of Series A convertible preferred stock to common stock on June 7, 1988                              -          -
Conversion of Series B convertible preferred stock to common stock on June 7, 1988                              -          -
Exercise of stock options at $2.00 per share                                                                    -          -
Issuance of common stock at $28.49 per share on March 6, 1989 (net of costs of issuance of $21,395)             -          -
Issuance of common stock at $28.49 per share on March 30, 1989 (net of costs of issuance of $10,697)            -          -
Sale of options at $28.29 per share to purchase common stock at $.20 per share on
 March 30, 1989 (net of costs of issuance of $4,162)                                                            -          -
Net loss                                                                                                        -          -
Deferred compensation relating to grant of stock options                                                        -          -
Amortization of deferred compensation                                                                           -          -
                                                                                                             --------    -------

Balance at May 31, 1989                                                                                         -          -
Net loss                                                                                                        -          -
Deferred compensation relating to grant of stock options                                                        -          -
Amortization of deferred compensation                                                                           -          -
                                                                                                             --------    -------

Balance at May 31, 1990                                                                                         -          -
Net loss                                                                                                        -          -
Amortization of deferred compensation                                                                           -          -
                                                                                                             --------    -------

Balance at May 31, 1991                                                                                         -          -
Exercise of stock warrants at $5.60 per share                                                                   -          -
Net loss                                                                                                        -          -
Amortization of deferred compensation                                                                           -          -
                                                                                                             --------    -------

Balance at May 31, 1992                                                                                         -          -
Exercise of stock warrants at $7.14 per share                                                                   -          -
Issuance of common stock at $15.19 per share on April 19, 1993 (net of costs of issuance of $20,724)            -          -
Net loss                                                                                                        -          -
Amortization of deferred compensation                                                                           -          -
                                                                                                             --------    -------

Balance at May 31, 1993                                                                                         -          -
                                                                                                             --------    -------
</TABLE>





                                      F-3

<PAGE>   7



<TABLE>
<CAPTION>


                     Series A convertible   Series B convertible              Deficit                    Total
    Common stock       preferred stock        preferred stock               accumulated                  share-
-------------------  -------------------    -------------------  Additional  during the     Deferred    holders'
 Number   Aggregate   Number   Aggregate     Number  Aggregate    paid-in    development     compen-     equity
of shares   amount   of shares  amount      of shares  amount     capital       stage        sation    (deficit)
--------- ---------  --------- ---------    --------- --------   ----------  -----------   ----------  ----------
<C>       <C>         <C>      <C>          <C>       <C>         <C>          <C>           <C>       <C>
3,500,000 $  35,000      -         -            -    $    -         (28,000)        -            -          7,000

     -         -      250,000   250,000         -         -         670,850         -            -        920,850
     -         -         -         -            -         -            -        (607,688)        -       (607,688)
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
3,500,000    35,000   250,000   250,000         -         -         642,850     (607,688)        -        320,162
     -         -         -         -            -         -            -      (2,429,953)        -     (2,429,953)
     -         -         -         -            -         -       2,340,000         -      (2,340,000)       -
     -         -         -         -            -         -            -            -         720,000     720,000
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
3,500,000    35,000   250,000   250,000         -         -       2,982,850   (3,037,641)  (1,620,000) (1,389,791

     -         -         -         -         200,633   200,633    6,882,502         -            -      7,083,135
     -         -         -         -            -         -            -      (3,057,254)        -     (3,057,254)
     -         -         -         -            -         -            -            -         566,136     566,136
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
3,500,000    35,000   250,000   250,000      200,633   200,633    9,865,352   (6,094,895)  (1,053,864)  3,202,226
  413,020     4,130      -         -            -         -       9,749,870         -            -      9,754,000
1,250,000    12,500  (250,000) (250,000)        -         -         237,500         -            -           -
1,003,165    10,032      -         -        (200,633) (200,633)     190,601         -            -           -
   47,115       471      -         -            -         -          93,759         -            -         94,230
  175,525     1,755      -         -            -         -       4,976,855         -            -      4,978,610
   87,760       878      -         -            -         -       2,488,356         -            -      2,489,234

     -         -         -         -            -         -       7,443,118         -            -      7,443,118
     -         -         -         -            -         -            -        (791,206)        -       (791,206)
     -         -         -         -            -         -         683,040         -        (683,040)       -
     -         -         -         -            -         -            -            -         800,729     800,729
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
6,476,585    64,766      -         -            -         -      35,728,451   (6,886,101)    (936,175) 27,970,941
     -         -         -         -            -         -            -      (3,490,394)        -     (3,490,394)
     -         -         -         -            -         -         699,163         -        (699,163)       -
     -         -         -         -            -         -            -            -         546,278     546,278
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
6,476,585    64,766      -         -            -         -      36,427,614  (10,376,495)  (1,089,060) 25,026,825
     -         -         -         -            -         -            -      (5,579,872)        -     (5,579,872)
     -         -         -         -            -         -            -            -         435,296     435,296
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
6,476,585    64,766      -         -            -         -      36,427,614  (15,956,367)    (653,764) 19,882,249
   90,000       900      -         -            -         -         503,100         -            -        504,000
     -         -         -         -            -         -            -      (7,006,495)        -     (7,006,495)
     -         -         -         -            -         -            -            -         254,025     254,025
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
6,566,585    65,666      -         -            -         -      36,930,714  (22,962,862)    (399,739) 13,633,779
   15,000       150      -         -            -         -         106,890         -            -        107,040
  374,370     3,744      -         -            -         -       5,663,710         -            -      5,667,454
     -         -         -         -            -         -            -      (8,066,609)        -     (8,066,609)
     -         -         -         -            -         -            -            -         254,025     254,025
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
6,955,955    69,560      -         -            -         -      42,701,314  (31,029,471)    (145,714)  1,595,689
--------- ---------   -------   -------     --------- --------   ----------  -----------   ----------  ----------
</TABLE>






<PAGE>   8
                          NORTHFIELD LABORATORIES INC.
                      (a company in the development stage)

             Statements of Shareholders' Equity (Deficit), continued

                 Nine months ended February 29, 2000 and for the period from
         June 19, 1985 (inception) through February 29, 2000


<TABLE>
<CAPTION>



                                                                                                       Preferred stock
                                                                                                     --------------------
                                                                                                      Number    Aggregate
                                                                                                     of shares   amount
                                                                                                     ---------  ---------
<S>                                                                                                    <C>         <C>
Net loss                                                                                                 --    $   --
Issuance of common stock at $6.50 per share on May 26, 1994 (net of costs of issuance of $2,061,149)     --        --
Cancellation of stock options                                                                            --        --
Amortization of deferred compensation                                                                    --        --
                                                                                                     ---------  ---------

Balance at May 31, 1994                                                                                   --        --
Net loss                                                                                                  --        --
Issuance of common stock at $6.50 per share on June 20, 1994 (net of issuance costs of $172,500)          --        --
Exercise of stock options at $7.14 per share                                                              --        --
Exercise of stock options at $2.00 per share                                                              --        --
Cancellation of stock options                                                                             --        --
Amortization of deferred compensation                                                                     --        --
                                                                                                     ---------  ---------

Balance at May 31, 1995                                                                                   --        --
Net loss                                                                                                  --        --
Issuance of common stock at $17.75 per share on August 9, 1995 (net of issuance costs of $3,565,125)      --        --
Issuance of common stock at $17.75 per share on September 11, 1995 (net of issuance costs of $423,238)    --        --
Exercise of stock options at $2.00 per share                                                              --        --
Exercise of stock options at $6.38 per share                                                              --        --
Exercise of stock options at $7.14 per share                                                              --        --
Cancellation of stock options                                                                             --        --
Amortization of deferred compensation                                                                     --        --
                                                                                                     ---------  ---------

Balance at May 31, 1996                                                                                   --        --
Net loss                                                                                                  --        --
Exercise of stock options at $0.20 per share                                                              --        --
Exercise of stock options at $2.00 per share                                                              --        --
Exercise of stock options at $7.14 per share                                                              --        --
Amortization of deferred compensation                                                                     --        --
                                                                                                     ---------  ---------

Balance at May 31, 1997                                                                                   --        --
Net loss                                                                                                  --        --
Exercise of stock options at $7.14 per share                                                              --        --
Amortization of deferred compensation                                                                     --        --
                                                                                                     ---------  ---------

Balance at May 31, 1998                                                                                   --        --
Net loss                                                                                                  --        --
Non-cash compensation                                                                                     --        --
Exercise of stock options at $7.14 per share                                                              --        --
Exercise of stock warrants at $8.00 per share                                                             --        --
                                                                                                     ---------  ---------

Balance at May 31, 1999                                                                                   --        --
Net loss (unaudited)                                                                                      --        --
Non-cash compensation (unaudited)                                                                         --        --
Exercise of stock options at $13.38 per share                                                             --        --
                                                                                                     ---------  ---------


Balance at February 29, 2000 (unaudited)                                                                  --   $    --
                                                                                                     ---------  ---------
</TABLE>


See accompanying independent accountants' review report.





<PAGE>   9


<TABLE>
<CAPTION>


                            Series A convertible  Series B convertible                  Deficit                      Total
        Common stock          preferred stock       preferred stock                   accumulated                    share-
 ------------------------   -------------------  ---------------------   Additional    during the     Deferred      holders'
    Number      Aggregate    Number   Aggregate   Number    Aggregate     paid-in     development      compen-       equity
  of shares       amount    of shares  amount    of shares    amount      capital        stage         sation      (deficit)
 -----------    ---------   --------- ---------  ---------   ---------  -----------   -----------    ---------    -----------
<S>               <C>       <C>        <C>       <C>         <C>        <C>            <C>            <C>         <C>
       --       $   --           --  $  --           --    $      --           --      (7,363,810)       --        (7,363,810)
  2,500,000       25,000         --     --           --           --     14,163,851          --          --        14,188,851
       --           --           --     --           --           --        (85,400)         --        85,400           --
       --           --           --     --           --           --           --            --           267             267
 -----------    ---------   --------- ---------  ---------   ---------  -----------   -----------    ---------    -----------
  9,455,955       94,560         --     --           --           --     56,779,765   (38,393,281)    (60,047)     18,420,997
       --           --           --     --           --           --           --      (7,439,013)       --        (7,439,013)
    375,000        3,750         --     --           --           --      2,261,250          --          --         2,265,000
     10,000          100         --     --           --           --         71,300          --          --            71,400
    187,570        1,875         --     --           --           --        373,264          --          --           375,139
       --           --           --     --           --           --       (106,750)         --       106,750           --
       --           --           --     --           --           --           --            --       (67,892)        (67,892)
 -----------    ---------   --------- ---------  ---------   ---------  -----------   -----------    ---------    -----------
 10,028,525      100,285         --     --           --           --     59,378,829   (45,832,294)    (21,189)     13,625,631
       --           --           --     --           --           --           --      (4,778,875)       --        (4,778,875)
  2,925,000       29,250         --     --           --           --     48,324,374          --          --        48,353,624
    438,750        4,388         --     --           --           --      7,360,187          --          --         7,364,575
    182,380        1,824         --     --           --           --        362,937          --          --           364,761
      1,500           15         --     --           --           --          9,555          --          --             9,570
     10,000          100         --     --           --           --         71,300          --          --            71,400
       --           --           --     --           --           --        (80,062)         --        80,062           --
       --           --           --     --           --           --           --            --       (62,726)        (62,726)
 -----------    ---------   --------- ---------  ---------   ---------  -----------   -----------    ---------    -----------
 13,586,155      135,862         --     --           --           --    115,427,120   (50,611,169)     (3,853)     64,947,960
       --           --           --     --           --           --           --      (4,245,693)       --        (4,245,693)
    263,285        2,633         --     --           --           --         50,025          --          --            52,658
    232,935        2,329         --     --           --           --        463,540          --          --           465,869
     10,000          100         --     --           --           --         71,300          --          --            71,400
       --           --           --     --           --           --           --            --         2,569           2,569
 -----------    ---------   --------- ---------  ---------   ---------  -----------   -----------    ---------    -----------
 14,092,375      140,924         --     --           --           --    116,011,985   (54,856,862)     (1,284)     61,294,763
       --           --           --     --           --           --           --      (5,883,378)       --        (5,883,378)
      5,000           50         --     --           --           --         35,650          --          --            35,700
       --           --           --     --           --           --           --            --         1,284           1,284
 -----------    ---------   --------- ---------  ---------   ---------  -----------   -----------    ---------    -----------
 14,097,375      140,974         --     --           --           --    116,047,635   (60,740,240)       --        55,448,369
       --           --           --     --           --           --           --      (7,416,333)       --        (7,416,333)
       --           --           --     --           --           --         14,354          --          --            14,354
     17,500          175         --     --           --           --        124,775          --          --           124,950
    125,000        1,250         --     --           --           --        998,750          --          --         1,000,000
 -----------    ---------   --------- ---------  ---------   ---------  -----------   -----------    ---------    -----------
 14,239,875      142,399         --     --           --           --    117,185,514   (68,156,573)        --       49,171,340
       --           --           --     --           --           --           --      (6,809,815)        --       (6,809,815)
       --           --           --     --           --           --         43,062          --           --           43,062
      2,500           25         --     --           --           --         33,425          --           --           33,450
 -----------    ---------   --------- ---------  ---------   ---------  -----------   -----------    ---------    -----------
 14,242,375   $  142,424         --  $  --           --       $   --    117,262,001   (74,966,388)        --       42,438,037
 ===========    =========   ========= =========  =========   =========  ===========   ===========    =========    ===========
</TABLE>

<PAGE>   10



                          NORTHFIELD LABORATORIES INC.
                      (a company in the development stage)

                            Statements of Cash Flows

     Nine months ended February 29, 2000 and February 28, 1999 and for the
        period from June 19, 1985 (inception) through February 29, 2000

<TABLE>
<CAPTION>


                                                                                   Cumulative
                                                         Nine months ended            from
                                                     --------------------------   June 19, 1985
                                                     February 29,  February 28,      through
                                                         2000          1999     February 29, 2000
                                                     ------------  ------------ -----------------
                                                      (unaudited)   (unaudited)    (unaudited)
<S>                                                      <C>           <C>       <C>
Cash flows from operating activities:
 Net loss                                            $(6,809,815)   (5,136,476)    (74,966,388)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
   Depreciation and amortization                         325,417       393,646      14,183,483
   Non-cash compensation and other adjustments            74,328            --       3,538,673
   Loss on sale of equipment                                  --            --          66,359
   Changes in assets and liabilities:
    Prepaid expenses                                     194,964       173,267        (316,487)
    Other current assets                                 (61,126)     (431,486)     (2,225,807)
    Other assets                                              --            --           6,953
    Accounts payable                                    (353,771)     (204,361)        971,259
    Accrued expenses                                      (8,716)      (31,036)        111,908
    Accrued compensation and benefits                     38,215        48,444         259,215
    Other liabilities                                     16,510         1,024         141,212
                                                     ------------  ------------ -----------------
     Net cash used in operating activities            (6,583,994)   (5,186,978)    (58,229,620)
                                                     ------------  ------------ -----------------
Cash flows from investing activities:
 Purchase of property, plant, equipment,
  and capitalized engineering costs                   (2,145,445)     (225,201)    (16,878,857)
 Proceeds from matured marketable securities          15,549,200    42,649,200     349,389,981
 Proceeds from sale of marketable securities                  --            --       7,141,656
 Purchase of marketable securities                    (4,909,192)  (37,657,334)   (367,597,079)
 Proceeds from sale of land and equipment              1,786,436            --       1,863,023
                                                     ------------  ------------ -----------------
     Net cash provided by (used in)                    10,280,999    4,766,665     (26,081,276)
                                                     ------------  ------------ -----------------
        investing activities
Cash flows from financing activities:
 Proceeds from issuance of common stock                    33,450           --     103,521,928
 Payment of common stock issuance costs                        --           --      (5,072,012)
 Proceeds from issuance of preferred stock                     --           --       6,644,953
 Proceeds from sale of stock options to                                              7,443,118
  purchase common shares                                       --      124,950
 Proceeds from issuance of notes payable                       --           --       1,500,000
 Repayment of notes payable                                    --           --        (140,968)
                                                     ------------  ------------ -----------------
     Net cash provided by financing activities             33,450      124,950     113,897,019
                                                     ------------  ------------ -----------------

     Net increase (decrease) in cash                    3,730,455     (295,363)     29,586,123

Cash at beginning of period                            25,855,668   26,473,577
                                                     ------------  ------------ -----------------

Cash at end of period                                $ 29,586,123   26,178,214      29,586,123
                                                     ============  ============ =================

</TABLE>


See accompanying independent accountants' review report.



<PAGE>   11



                          NORTHFIELD LABORATORIES INC.
                      (a company in the development stage)

                          Notes to Financial Statements

                                February 29, 2000




  (1)   BASIS OF PRESENTATION

        The interim financial statements presented are unaudited but, in the
        opinion of management, have been prepared in conformity with generally
        accepted accounting principles applied on a basis consistent with those
        of the annual financial statements. Such interim financial statements
        reflect all adjustments (consisting of normal recurring accruals)
        necessary for a fair presentation of the financial position and the
        results of operations for the interim periods presented. The results of
        operations for the interim period presented are not necessarily
        indicative of the results to be expected for the year ending May 31,
        2000. The interim financial statements should be read in connection with
        the audited financial statements for the year ended May 31, 1999.

  (2)   COMPUTATION OF NET LOSS PER SHARE

        Basic earnings per share is based on the weighted average number of
        shares outstanding and excludes the dilutive effect of unexercised
        common stock equivalents. Diluted earnings per share is based on the
        weighted average number of shares outstanding and includes the dilutive
        effect of unexercised common stock equivalents. Because the Company
        reported a net loss for all periods presented, per share amounts reflect
        the use of the Basic method only.

  (3)   RECLASSIFICATIONS

        Certain reclassifications were made to the prior period financial
        statements in order to conform with the current period presentation.

  (4)   SIGNIFICANT TRANSACTIONS

        On September 14, 1999, the Company sold a parcel of undeveloped land in
        Waukegan, Illinois back to its original owner in accordance with the
        terms of the original purchase agreement. No gain or loss was recognized
        on the sale.

        On September 16, 1999, the Company executed a lease amendment to include
        the 35,000 square foot space adjacent to its current Mt. Prospect,
        Illinois facility under comparable lease terms. The first lease option
        expires on August 30, 2004.



<PAGE>   12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

         Since Northfield's incorporation in 1985, we have devoted substantially
all of our efforts and resources to the research, development and clinical
testing of our potential product, PolyHemeTM. We have incurred operating losses
during each year of our operations since inception and expect to incur
substantial additional operating losses for the next several years. From
Northfield's inception through February 29, 2000, we have incurred operating
losses totaling $74,966,000.

         Our success will depend on several factors, including our ability to
obtain Food & Drug Administration regulatory approval of PolyHeme and our
manufacturing facilities, obtain sufficient quantities of blood to manufacture
PolyHeme in commercial quantities, manufacture and distribute PolyHeme in a
cost-effective manner, and enforce our patent positions. We have experienced
significant delays in the development and clinical testing of PolyHeme. We
cannot ensure that we will be able to achieve these goals or that we will be
able to realize product revenues or profitability on a sustained basis or at
all.

         We anticipate that research and development expenses will increase
during the foreseeable future. These expected increases are attributable to
anticipated future clinical trials, monitoring and reporting the results of
these trials and continuing process development associated with improving our
manufacturing capacity to permit commercial-scale production of PolyHeme. We
expect that




<PAGE>   13
general and administrative expenses will remain near current levels over the
balance of the fiscal year.

                             RESULTS OF OPERATIONS

         We reported no revenues for either of the three-month periods ended
February 29, 2000 or February 28, 1999. From Northfield's inception through
February 29, 2000, we have reported total revenues of $3,000,000, all of which
were derived from licensing fees.

OPERATING EXPENSES

         Operating expenses for our third fiscal quarter ended February 29, 2000
totaled $3,023,000, an increase of $726,000 from the $2,297,000 reported in the
third quarter of fiscal 1999. Measured on a percentage basis, total expenses in
the third quarter of fiscal 2000 increased by 31.6%. This increase was due to
increased costs associated with our ongoing clinical trials, expanding our
manufacturing organization, as well as preparing regulatory documentation for
our manufacturing facility.

         Research and development expenses for our third quarter of fiscal 2000
totaled $2,365,000, an increase of $665,000, or 39.1%, from the $1,700,000,
reported in the third quarter of fiscal 1999. The majority of the increase in
research and development expenses resulted from costs associated with our
clinical trials, producing PolyHeme for use in our clinical trials,




<PAGE>   14
expansion of our manufacturing organization and validation services. Phase III
and Phase II clinical trials are ongoing.

         For the nine-month period ended February 29, 2000, research and
development expenses totaled $6,851,000, representing an increase of $1,468,000,
or 27.3%, from the nine-month period ended February 28, 1999. Substantially all
of the fiscal year to date increase over the comparable prior year period comes
from increased expenses related to the Company's Phase III clinical trials,
adding personnel to the manufacturing organization and validation services.

         We anticipate that research and development expenses will continue to
increase significantly for the foreseeable future. Additional costs are being
planned for multi-center clinical trials, third party clinical monitoring,
biostatistical analysis, report preparation, expanding the manufacturing
organization and developing additional sources of hemoglobin.

         General and administrative expenses for the third quarter of fiscal
2000 totaled $658,000 compared to expenses of $598,000 in the third quarter of
1999, representing an increase of $60,000, or 10.0%. We continue to prioritize
research and development over general and administrative expenses. We were able
to effectively control general and administrative costs while increasing the
level of research and development activity. We expect the level of general and
administrative expenses to remain constrained over the near term.




<PAGE>   15
         General and administrative expenses for the nine-month period ended
February 29, 2000 totaled $1,666,000 which represents a $83,000, or 4.7%,
decrease from the $1,749,000 in the comparable prior year period.

INTEREST INCOME

         Interest income in the third quarter of fiscal 2000 totaled $558,000,
or a $48,000 decrease from the $606,000 in interest income reported in the third
quarter of fiscal 1999. Higher interest rates in fiscal 2000 were offset by
lower available investment balances compared to the prior year. Interest income
is expected to remain below prior year levels for the remainder of fiscal 2000
as we continue to utilize our existing cash resources to fund the business.

         Interest income for the nine-month period ended February 29, 2000
totaled $1,708,000, or a $287,000 decrease from the comparable prior year
period. Higher interest rates were not sufficient to offset declining available
investment balances and caused the year over year decline in interest income.

NET LOSS

         The net loss for the third quarter ended February 29, 2000 was
$2,464,000, or $.17 per basic share, compared to a net loss of $1,691,000, or
$.12 per basic share, for the third quarter ended February 28, 1999. The
increase in the loss per basic share is primarily the result of the




<PAGE>   16
increase in expenditures associated with our ongoing clinical trials, expansion
of our manufacturing organization and validation services.

         For the nine-month period ended February 29, 2000, Northfield reported
a loss of $6,810,000, or $.48 per basic share, compared to the comparable prior
year period results of a loss of $5,136,000, or $.36 per basic share. Higher
research and development expenses, including expansion of the manufacturing
organization, in fiscal 2000 caused the reported loss and per basic share loss
to increase.

LIQUIDITY AND CAPITAL RESOURCES

         From Northfield's inception through February 29, 2000, we have used
cash for operating activities, the purchase of property plant and equipment and
for engineering services in the amount of $75,108,000. For the nine-month
periods ended February 29, 2000 and February 28, 1999, these cash expenditures
totaled $8,729,000, and $5,412,000, respectively. The increased cash outlay for
the nine month period compared to the comparable prior year period reflects an
increased level of capital spending related to our facility expansion, as well
as increased operating expenses.

         We have financed our research and development and other activities to
date primarily through the public and private sale of equity securities and, to
a more limited extent, through the licensing of product rights. As of February
29, 2000, we had cash and marketable securities totaling $40,652,000.




<PAGE>   17
         During fiscal 1999, Northfield notified the seller of a parcel of
undeveloped land previously purchased as the site for our initial commercial-
scale manufacturing facility of our intention to delay development of the site.
Under the terms of the land purchase contract, the seller had the right to
repurchase the property for an amount equal to our acquisition cost of
approximately $1,786,000. The original seller of the property gave notice of
intent to repurchase the property in August 1999 and we closed the transaction
and received the proceeds in September 1999, the second quarter of fiscal year
2000.

         We believe our existing capital resources will be adequate to satisfy
our operating capital requirements and maintain our existing pilot manufacturing
plant and office facilities for approximately the next two to three years.
Thereafter, we are likely to require substantial additional capital to continue
our operations. We are currently unable to fund the construction of a
large-scale greenfield manufacturing facility, which is estimated to cost
approximately $45-$50 million, without raising substantial additional capital.
After a two month shutdown this fall, new equipment was installed in our current
manufacturing facility bringing our annual manufacturing capacity to
approximately 10,000 units. As part of the second step of our planned expansion
we amended our existing lease in September 1999 to include space adjacent to our
current manufacturing facility. Engineering on the additional space is currently
underway and indicates additional capacity of 50-60,000 units could be developed
in approximately 16-18 months at a cost of $20-22 million. Northfield is
evaluating this approach due to the capital required to build a greenfield
facility with a 300,000 unit capacity. Northfield's views the smaller facility
as financially prudent yet large enough for commercial viability.





<PAGE>   18
         We may enter into collaborative arrangements with strategic partners
who could provide us with additional funding or absorb expenses we would
otherwise be required to pay. We have engaged in discussions with a number of
potential strategic partners. These discussions are at various stages and we
cannot ensure that any of these arrangements will be consummated.

         Our capital requirements may vary materially from those now anticipated
because of the results of our clinical testing of PolyHeme, the establishment of
relationships with strategic partners, changes in the scale, timing or cost of
our commercial manufacturing facility, competitive and technological advances,
the FDA regulatory process, changes in our marketing and distribution strategy
and other factors.

YEAR 2000

         At this writing, we have completed three (3) months of the year 2000.
Critical external utilities remain available. Internal control systems and data
processing applications are working as expected. No disruption to the business
occurred.




<PAGE>   19
                          PART II.  OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

            EXHIBIT 15 - Letter RE: Unaudited Interim Financial Information

            EXHIBIT 27 - Financial Data Schedule

        (b) None.
<PAGE>   20

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on April 12, 2000.


                                      NORTHFIELD LABORATORIES INC.


                                      By  /s/ RICHARD E. DEWOSKIN
                                         ---------------------------------------
                                         Richard E. DeWoskin
                                         Chairman of the Board and
                                         Chief Executive Officer


                                      By  /s/ JACK J. KOGUT
                                         ---------------------------------------
                                         Jack J. Kogut
                                         Secretary and Treasurer
                                         (principal financial officer and
                                         principal accounting officer)