<PAGE>
                                  UNITED STATES
                       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 June 30, 2003 OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD ________ to ________.

                        COMMISSION FILE NUMBER: 000-31745

                          THIRD WAVE TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its charter)

             DELAWARE                                         39-1791034
   (State or other jurisdiction                           (I.R.S. Employer
 of incorporation or organization)                       Identification No.)

502 S. ROSA ROAD, MADISON, WI                                    53719
(Address of principal executive offices)                       (Zip Code)

                                 (888) 898-2357
              (Registrant's telephone number, including area code)

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

Indicate by check whether the Registrant is an accelerated filer (as defined in
Exchange Act Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

The number of shares outstanding of the registrant's Common Stock, $.001 par
value, as of June 30, 2003, was 39,802,363.


<PAGE>
                          THIRD WAVE TECHNOLOGIES, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 2003

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                              Page No.
<S>                                                                                                           <C>
            PART I FINANCIAL INFORMATION....................................................................     3
                 Item 1. Consolidated Financial Statements..................................................     3
                     Consolidated Balance Sheets as of June 30, 2003 and December 31,
                     2002...................................................................................     3
                     Consolidated Statements of Operations for the three and six months ended
                     June 30, 2003 and 2002.................................................................     4
                     Consolidated Statements of Cash Flows for the six months ended June 30, 2003
                     and 2002...............................................................................     5
                     Notes to Consolidated Financial Statements.............................................     6
                 Item 2. Management's Discussion and Analysis of Financial Condition and
                     Results of Operations..................................................................    10
                 Item 3. Quantitative and Qualitative Disclosures About Market Risk.........................    13
                 Item 4. Controls and Procedures............................................................    14
            PART II  OTHER INFORMATION......................................................................    14
                 Item 1. Legal Proceedings..................................................................    14
                 Item 2. Changes In Securities And Use Of Proceeds..........................................    14
                 Item 3. Defaults Upon Senior Securities....................................................    15
                 Item 4. Submission Of Matters To A Vote Of Security Holders................................    15
                 Item 5. Other Information..................................................................    15
                 Item 6. Exhibits And Reports On Form 8-K...................................................    15
            SIGNATURES......................................................................................    16
</TABLE>


                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                          THIRD WAVE TECHNOLOGIES, INC.
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                         JUNE 30, 2003      DECEMBER 31, 2002
                                                                                          UNAUDITED
<S>                                                                                   <C>                   <C>
ASSETS
Current assets:
  Cash and cash equivalents                                                           $    45,819,641        $    49,301,501
  Short-term investments                                                                   10,965,000             11,013,000
  Receivables, net of allowance for doubtful accounts of $852,400 and                       3,776,440              2,724,856
       $465,000 at June 30, 2003 and December 31, 2002, respectively
  Inventories                                                                               1,688,830              1,660,344
  Prepaid expenses and other                                                                  627,766              1,145,687
                                                                                      ---------------        ---------------
Total current assets                                                                       62,877,677             65,845,388
Equipment and leasehold improvements:
  Machinery and equipment                                                                  18,451,139             18,449,319
  Leasehold improvements                                                                    2,084,825              2,091,457
                                                                                      ---------------        ---------------
                                                                                           20,535,964             20,540,776
  Less accumulated depreciation                                                            10,865,371              9,617,330
                                                                                      ---------------        ---------------
                                                                                            9,670,593             10,923,446
Assets held for sale                                                                           62,035                336,000
Intangible assets, net of accumulated amortization                                          6,403,500              7,155,876
Indefinite lived intangible assets                                                          1,007,411              1,007,411
Goodwill                                                                                      489,873                489,873
Other long term assets                                                                      3,150,862              3,465,244
                                                                                      ---------------        ---------------
Total assets                                                                          $    83,661,951        $    89,223,238
                                                                                      ===============        ===============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                                    $     7,328,163        $     7,088,962
  Accrued payroll and related liabilities                                                   1,923,726              2,260,563
  Other accrued liabilities                                                                 1,528,954              2,517,315
  Deferred revenue                                                                            521,184                945,664
  Long-term debt due within one year                                                        9,502,215              9,515,152
                                                                                      ---------------        ---------------
Total current liabilities                                                                  20,804,242             22,327,656
Long-term debt                                                                                 13,333                 13,333
Other liabilities                                                                           1,826,418              1,595,181

Shareholders' equity:
  Participating preferred stock, Series A, $.001 par value,
       10,000,000 shares authorized, 0 shares issued and outstanding                                0                      0
  Common stock, $.001 par value, 100,000,000 shares authorized,
       39,802,363 and 39,559,574 shares issued and outstanding,
       respectively                                                                            39,802                 39,560
  Additional paid-in capital                                                              192,003,980            191,581,136
  Unearned stock compensation                                                                (222,904)              (618,246)
  Accumulated other comprehensive loss                                                         (2,968)                     -
  Accumulated deficit                                                                    (130,799,952)          (125,715,382)
                                                                                      ---------------        ---------------
Total shareholders' equity                                                                 61,017,958             65,287,068
                                                                                      ---------------        ---------------
Total liabilities and shareholders' equity                                            $    83,661,951        $    89,223,238
                                                                                      ===============        ===============
</TABLE>

                See accompanying notes to financial statements.







                                       3
<PAGE>



                          THIRD WAVE TECHNOLOGIES, INC.

                      Consolidated Statements of Operations
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                     Three Months Ended June 30,          Six Months Ended June 30,
                                                 ---------------------------------     ------------------------------
                                                        2003              2002               2003           2002
                                                 ---------------------------------     ------------------------------
<S>                                              <C>                  <C>              <C>              <C>
Revenues:
     Product sales                                   $  8,515,318     $  9,108,418     $ 16,701,055     $ 18,603,177
     Development revenue                                  250,000          426,460          500,000          803,126
     License and royalty revenue                           28,028                0           53,600                0
     Grant revenue                                         23,875           52,745           54,457          308,947
                                                 ---------------------------------     ------------------------------

Total revenues                                          8,817,221        9,587,623       17,309,112       19,715,250
                                                 ---------------------------------     ------------------------------

Operating expenses:
     Cost of goods sold
        Product cost of goods sold                      2,999,058        6,119,240        5,712,041       13,314,057
        Intangible asset amortization                     376,188          482,640          752,376          965,280
                                                 ---------------------------------     ------------------------------
     Total cost of goods sold                           3,375,246        6,601,880        6,464,417       14,279,337

     Research and development                           2,741,571        3,634,439        5,411,078        8,081,221
     Selling and marketing                              2,531,779        2,206,306        4,885,902        4,819,980
     General and administrative                         2,405,445        3,093,644        5,812,803        5,804,522
                                                 ---------------------------------     ------------------------------

Total operating expense                                11,054,041       15,536,269       22,574,200       32,985,060
                                                 ---------------------------------     ------------------------------

Loss from operations                                   (2,236,820)      (5,948,646)      (5,265,088)     (13,269,810)

Other income (expense):
     Interest income                                      160,271          259,295          331,066          558,413
     Interest expense                                     (92,000)        (316,824)        (184,083)        (672,281)
     Other                                                  7,804         (121,494)          33,535          (62,232)
                                                 ---------------------------------     ------------------------------

Other income (expense)                                     76,075         (179,023)         180,518         (176,100)
                                                 ---------------------------------     ------------------------------

Net loss                                             $ (2,160,745)    $ (6,127,669)    $ (5,084,570)    $(13,445,910)
                                                 =================================     ==============================

Net loss per share - basic and diluted               $      (0.05)    $      (0.16)    $      (0.13)    $      (0.34)
                                                 =================================     ==============================

Weighted Average Shares outstanding                    39,699,313       39,445,959       39,631,630       39,412,577
                                                 =================================     ==============================
</TABLE>



                See accompanying notes to financial statements.






                                       4
<PAGE>

                          THIRD WAVE TECHNOLOGIES, INC.

                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                          SIX MONTHS ENDED
                                                                                              JUNE 30,
                                                                               ---------------------------------------
                                                                                     2003                    2002
                                                                               ---------------         ---------------
<S>                                                                            <C>                     <C>
OPERATING ACTIVITIES:
Net loss                                                                       $    (5,084,570)        $   (13,445,910)
Adjustments to reconcile net loss to net cash used in operating
   activities:
   Depreciation and amortization                                                     1,548,043               4,828,606
   Amortization of intangible assets                                                   752,376                 993,780
   Noncash stock compensation                                                          434,849                 604,493
   (Gain) loss on disposal of equipment                                                 37,152                 (90,874)
   Amortization of deferred gain                                                             0                  (8,400)
   Changes in operating assets and liabilities:
      Receivables                                                                   (1,054,552)             (3,386,135)
      Inventories                                                                      (28,486)              3,092,805
      Prepaid expenses and other assets                                                607,479                 570,565
      Accounts payable                                                                 239,201              (2,697,386)
      Accrued expenses and other liabilities                                        (1,093,962)                545,195
      Deferred revenue                                                                (424,480)               (741,077)
                                                                               ---------------         ---------------
Net cash used in operating activities                                               (4,066,950)             (9,734,338)
                                                                               ---------------         ---------------
INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements                                     (119,367)             (1,801,528)
Proceeds on sale of equipment                                                          285,815                 187,250
Sales and maturities of short-term investments                                          48,000                  96,000
                                                                               ---------------         ---------------
Net cash provided by (used in) investing activities                                    214,448              (1,518,278)
                                                                               ---------------         ---------------
FINANCING ACTIVITIES:
Payments on long-term debt                                                             (12,937)             (1,270,070)
Proceeds from common stock, net                                                        383,579                 195,321
Payments on capital lease obligations                                                        0                (795,204)
                                                                               ---------------         ---------------
Net cash provided by (used in) financing activities                                    370,642              (1,869,953)
                                                                               ---------------         ---------------
Net decrease in cash and cash equivalents                                           (3,481,860)            (13,122,569)
Cash and cash equivalents at beginning of period                                    49,301,501              73,131,123
                                                                               ---------------         ---------------
Cash and cash equivalents at end of period                                     $    45,819,641         $    60,008,554
                                                                               ===============         ===============
</TABLE>


                See accompanying notes to financial statements.



                                       5
<PAGE>


                          THIRD WAVE TECHNOLOGIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2003
                                   (unaudited)

(1) Basis of Presentation

The accompanying unaudited consolidated financial statements of Third Wave
Technologies, Inc. have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States for complete
financial statements. In the opinion of management, all adjustments, consisting
of normal recurring adjustments, considered necessary for a fair presentation
have been included. Interim results are not necessarily indicative of results
that may be expected for the year ending December 31, 2003.

The balance sheet at December 31, 2002 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States for complete financial statements.

The accompanying unaudited consolidated financial statements should be read in
conjunction with the audited financial statements and footnotes thereto included
in our Form 10-K for the fiscal year ended December 31, 2002 filed with the
Securities and Exchange Commission.

(2) Net Loss Per Share

In accordance with accounting principles generally accepted in the United
States, basic and diluted net loss per share has been computed using the
weighted-average number of shares of common stock outstanding during the
respective periods. Shares associated with stock options are not included
because they are antidilutive for the periods presented.

(3) Stock-Based Compensation

     Third Wave has stock-based employee compensation plans. SFAS No. 123,
"Accounting for Stock-Based Compensation," encourages, but does not require
companies to record compensation cost for stock-based employee compensation
plans at fair value. We have chosen to continue using the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations, in accounting for our stock
option plans.

     Had compensation cost been determined based upon the fair value at the
grant date for awards under the plans based on the provisions of SFAS No. 123,
our SFAS No. 123 pro forma net loss and net loss per share would have been as
follows:

<TABLE>
<CAPTION>
                                         Three months ended June 30,            Six months ended June 30,
                                         2003                 2002                2003              2002
                                      ------------        -------------     --------------      --------------
<S>                                    <C>                <C>               <C>                <C>
Net loss, as reported                 $ (2,160,745)       $  (6,127,669)    $    (5,084,570)   $   (13,445,910)
Add:  Stock based compensation,
   as reported                             199,576              192,481             434,849            604,493
Less: Stock-based compensation,
   using fair value method              (1,196,117)          (1,254,611)         (2,232,717)        (2,120,168)
                                      ---------------------------------     ----------------------------------

Pro forma net loss                    $ (3,157,286)       $  (7,189,799)    $    (6,882,438)   $   (14,961,585)
                                      ---------------------------------     ----------------------------------
Net loss per share, basic and
   diluted, as reported               $      (0.05)       $       (0.16)    $         (0.13)   $         (0.34)
Pro forma net loss per share,
   basic and diluted                  $      (0.08)       $       (0.18)    $         (0.17)   $         (0.38)
</TABLE>




                                       6
<PAGE>
(4) Inventories

Inventories, consisting mostly of raw materials, are carried at the lower of
cost or market using the first-in, first-out (FIFO) method for determining cost.

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                                            June 30,        December 31,
                                                                                              2003              2002
                                                                                       ----------------- ----------------
<S>                                                                                    <C>               <C>
                                Raw materials                                          $      2,886,826  $      4,253,090
                                Finished goods and work in process                              487,636           457,254
                                Reserve for excess and obsolete inventory                    (1,685,632)       (3,050,000)
                                                                                       ----------------- ----------------
                                Total inventories                                      $      1,688,830  $      1,660,344
                                                                                       ================  ================
</TABLE>

(5) Stock Compensation

Included in operating expenses are the following stock compensation charges, net
of reversals related to terminated employees:


<TABLE>
<CAPTION>
                                                         Three months ended                       Six months ended
                                                              June 30,                                 June 30,
                                                    2003                2002                 2003               2002
                                               ---------------     ---------------     ---------------     ---------------
<S>                                            <C>                 <C>                                     <C>
Cost of goods sold                             $        14,369     $        23,868     $        70,021     $        99,739
Research and development                                11,370              16,083              24,142              56,530
Selling and marketing                                    2,636               4,402               5,856              21,210
General and administrative                             171,201             148,128             334,830             427,014
                                               ---------------     ---------------     ---------------     ---------------
    Total stock compensation                   $       199,576     $       192,481     $       434,849     $       604,493
                                               ---------------     ---------------     ---------------     ---------------
</TABLE>


(6) Comprehensive Loss

The components of comprehensive loss are as follows:

<TABLE>
<CAPTION>
                                                                    Three months ended                    Six months ended
                                                                         June 30,                            June 30,
                                                                   2003           2002              2003               2002
                                                              ------------    -----------       ------------      --------------
<S>                                                           <C>          <C>                <C>               <C>
Net Loss                                                      $(2,160,745)    $(6,127,669)      $(5,084,570)     $ (13,445,910)

Other comprehensive loss:
    Foreign currency translation adjustments                       (2,209)              0            (2,968)                 0
                                                              -----------     -----------       -----------      -------------

Comprehensive loss                                            $(2,162,954)    $(6,127,669)      $(5,087,538)     $ (13,445,910)
                                                              ===========     ===========       ===========      =============
</TABLE>
(7) Derivative Instruments

We sell products in a number of countries throughout the world. In the quarter
ending June 30, 2003, we sold certain products with the resulting accounts
receivable denominated in Japanese Yen. Simultaneous with such sales and
purchase order commitments, we purchased foreign currency forward contracts to
manage the risk associated with foreign currency collections in the normal
course of




                                       7
<PAGE>
business. These derivative instruments have maturities of less than
one year and are intended to offset the effect of transaction gains and losses,
which arise when collections in a foreign currency are received after the asset
is generated. Contracts outstanding at June 30, 2003 represented a combined U.S.
dollar equivalent commitment of approximately $3.9 million. The changes in the
fair value of the derivatives and the loss or gain on the hedged asset relating
to the risk being hedged are recorded currently in earnings.

(8)  Goodwill and Intangible Assets

Effective January 1, 2002, we adopted Statement of Financial Accounting
Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." Under SFAS No.
142, goodwill and intangible assets deemed to have indefinite lives are no
longer amortized, but are subject to annual impairment tests. Other intangible
assets continue to be amortized over their useful lives.

     In connection with the adoption of SFAS No. 142, it was concluded that no
impairment existed at the time of adoption, and accordingly, we did not
recognize any transitional impairment loss for goodwill. For intangible assets
with indefinite lives, the fair values of these assets were compared to their
carrying values as of January 1, 2002, also resulting in no transitional
impairment.

     Identifiable intangible assets with indefinite lives consist of the
following:

<TABLE>
<CAPTION>
                                                                  JUNE 30,        DECEMBER 31,
                                                                    2003              2002
                                                              ---------------    ---------------
<S>                                                          <C>                <C>
                                   Technology license         $     1,053,000    $     1,053,000
                                   Impairment charge                 (137,172)          (137,172)
                                   Trademark                          421,000            421,000
                                   Impairment charge                 (329,417)          (329,417)
                                                              ---------------    ---------------
                                                              $     1,007,411    $     1,007,411
                                                              ===============    ===============
</TABLE>

     Amortizable intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                        JUNE 30, 2003                         DECEMBER 31, 2002
                                          --------------------------------------     --------------------------------------
                                                 GROSS                                     GROSS
                                               CARRYING           ACCUMULATED            CARRYING              ACCUMULATED
                                                AMOUNT           AMORTIZATION             AMOUNT              AMORTIZATION
                                          ---------------        ---------------     ---------------        ---------------
<S>                                       <C>                    <C>                 <C>                    <C>
       Costs of settling patent
         litigation                       $    10,533,248        $     4,129,748     $    10,533,248        $     3,377,372
       Reacquired marketing and
         distribution rights                    2,211,111              2,211,111           2,211,111              2,211,111
       Customer agreements                        171,000                 38,000             171,000                 38,000
       Impairment charge-- Customer
         agreements                              (133,000)                    --            (133,000)                    --
                                          ---------------        ---------------     ---------------        ---------------
                                          $    12,782,359        $     6,378,859     $    12,782.359        $     5,626,483
                                          ===============        ===============     ===============        ===============
</TABLE>

(9)  Restructuring and Impairment of Long Lived Assets

     During the third quarter of 2002, we announced a restructuring plan
designed to simplify product development and manufacturing operations and reduce
operating expenses. The restructuring charges recorded were determined based
upon plans submitted by the management and approved by the Board of Directors
using information available at the time. The restructuring charge of $11.1
million in 2002 included $2.5 million for the consolidation of facilities,
$500,000 for prepayment penalties mainly under capital lease arrangements, an
impairment charge of $7.2 million for abandoned leasehold improvements and
equipment to be sold or abandoned



                                       8
<PAGE>

and $945,000 of other costs related to the restructuring. We also recorded a
$1.1 million charge within cost of goods sold related to inventory that was
considered obsolete based upon the restructuring plan.

     Assets held for sale on the balance sheet represent equipment that we
continue to attempt to sell, written down to its estimated fair value. The
facilities charge contains estimates based upon our potential to sublease a
portion of the corporate office for a portion of the remaining lease term.
Actual results may differ from these estimates, which could require adjustments
to the restructuring accrual in future periods.

     The following table shows the components of the restructuring and other
charges and changes in the restructuring accrual through June 30, 2003. The
remaining facilities balance of $1.7 million included in the restructuring
accrual is primarily related to rent payments on non-cancelable leases, net of
estimated sublease income, which will continue to be paid over the respective
lease terms through 2011. The other component of the restructuring accrual
mainly represents amounts owed resulting from the termination of non-cancelable
purchase orders for equipment. The current portion of the accrual is included in
"Other accrued liabilities" on the balance sheet and the long-term portion is
included in "Other liabilities."

<TABLE>
<CAPTION>
                                                           Facilities                Other                   Total
<S>                                                    <C>                      <C>                    <C>
Accrued restructuring balance at
   December 31, 2002                                   $       2,158,038        $         805,580      $       2,963,618
Payments made                                                   (435,248)                (777,108)            (1,212,356)
                                                       -----------------        -----------------      -----------------
Accrued restructuring balance at
   June 30, 2003                                       $       1,722,790        $          28,472      $       1,751,262
                                                       -----------------        -----------------      -----------------

</TABLE>

(10) Reclassifications

Certain reclassifications have been made to the 2002 financial statements to
conform to the 2003 presentation.


                                       9
<PAGE>
                          THIRD WAVE TECHNOLOGIES, INC.

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

This Management's Discussion and Analysis of Financial Condition and Results of
Operations as of June 30, 2003 and for the three and six months ended June 30,
2003 and 2002 should be read in conjunction with our Form 10-K for the fiscal
year ended December 31, 2002 filed with the Securities and Exchange Commission.
In this Form 10-Q, the terms "we," "us," "our," "Company," and "Third Wave" each
refer to Third Wave Technologies, Inc. The following discussion of our financial
condition and results of our operations should be read in conjunction with our
Financial Statements, including the Notes thereto, included elsewhere in this
Form 10-Q. This Form 10-Q contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended. For a more detailed discussion of
such forward-looking statements and the potential risks and uncertainties that
may affect their accuracy, see the "Forward-Looking Statements" section of this
Form 10-Q.

OVERVIEW

Third Wave Technologies, Inc. is a leading genetic analysis products company. We
believe our proprietary Invader technology platform is easier to use, more
accurate and cost-effective, and enables higher testing throughput than
conventional methods based on polymerase chain reaction, or PCR. These and other
advantages conferred by our technology platform are enabling us to continue to
successfully serve select research customers, while focusing the majority of our
commercial effort on the rapidly growing, high-value clinical molecular
diagnostic market.

More than 100 clinical molecular diagnostic laboratory customers are using Third
Wave's products in routine patient care. Our research customer base includes the
most notable genome research projects in the world, including the Japanese
government's SNP Initiative and that government's share of the International
Haplotype Map Project. Other customers include pharmaceutical and biotechnology
companies, academic research centers and major health care providers.

Third Wave markets a growing number of products including analyte-specific
reagents (ASRs) for routine clinical use. These ASRs allow certified clinical
reference laboratories to create assays to screen for cystic fibrosis and other
inherited disorders, and to test for the Factor V Leiden and a host of other
mutations associated with predisposition to cardiovascular and other diseases.
We also market a series of Invader RNA Assays for measuring expression levels of
a number of genes.

Our financial results may vary significantly from quarter to quarter due to
fluctuations in the demand for our products, timing of new product introductions
and deliveries made during the quarter, the timing of research, development and
grant revenues, and increases in spending, including expenses related to our
product development.

CRITICAL ACCOUNTING POLICIES

     Management's discussion and analysis of our financial condition and results
of operations are based upon our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States. We review the accounting policies we use in reporting our
financial results on a regular basis. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses and related disclosure of
contingent assets and liabilities. On an ongoing basis, we evaluate our
estimates, including those related to accounts receivable, inventories,
equipment and leasehold improvements and intangible assets. We base our
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Results may differ from these
estimates due to actual outcomes being different from those on which we based
our assumptions. These estimates and judgments are reviewed by management on an
ongoing basis, and by the Audit Committee at the end of each quarter prior to
the public release of our financial results. We believe the following critical
accounting policies affect our more significant judgments and estimates used in
the preparation of our consolidated financial statements.



                                       10
<PAGE>

RESTRUCTURING AND OTHER CHARGES.

     The restructuring and other charges resulting from the restructuring plan
in the third quarter of 2002 has been recorded in accordance with EITF Issue No.
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)", Staff Accounting Bulletin No. 100, "Restructuring and
Impairment Charges," and FASB Statement No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." The restructuring charge is comprised
primarily of costs to consolidate facilities, impairment charges for abandoned
leasehold improvements and equipment to be sold or abandoned, prepayment
penalties related mainly to capital lease obligations on equipment to be sold or
abandoned, and other costs related to the restructuring. In calculating the cost
to consolidate the facilities, we estimated the future lease and operating costs
to be paid until the leases are terminated and the amount, if any, of sublease
receipts for each location. This required us to estimate the timing and costs of
each lease to be terminated, the amount of operating costs, and the timing and
rate at which we might be able to sublease the site. To form our estimates for
these costs, we performed an assessment of the affected facilities and
considered the current market conditions for each site. Estimates were also used
in our calculation of the estimated realizable value on equipment that is being
held for sale. These estimates were formed based on recent history of sales of
similar equipment and market conditions. Our assumptions on the lease
termination payments, operating costs until terminated, the offsetting sublease
receipts and estimated realizable value of equipment held for sale may turn out
to be incorrect and our actual cost may be materially different from our
estimates.

LONG-LIVED ASSETS-- IMPAIRMENT

     Equipment, leasehold improvements and amortizable identifiable intangible
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. For assets held and
used, if the sum of the expected undiscounted cash flows is less than the
carrying value of the related asset or group of assets, a loss is recognized for
the difference between the fair value and carrying value of the asset or group
of assets. For assets removed from service and held for sale, we estimate the
fair market value of such assets and record an adjustment if fair value less
costs to sell is lower than carrying value.

     Goodwill and intangible assets deemed to have indefinite lives are not
amortized, but are subject to annual impairment tests under Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
The annual impairment test was completed in September 2002, and annual
impairment test for current year will be completed in the third quarter ending
September 30, 2003.

DERIVATIVE INSTRUMENTS

     We sell products in a number of countries throughout the world. During 2003
and 2002, we sold certain products with the resulting accounts receivable
denominated in Japanese Yen. Simultaneous with such sales and purchase order
commitments, we purchased foreign currency forward contracts to manage the risk
associated with collections of receivables denominated in foreign currencies in
the normal course of business. These derivative instruments have maturities of
less than one year and are intended to offset the effect of transaction gains
and losses. Contracts outstanding at June 30, 2003 represented a combined U.S.
dollar equivalent commitment of approximately $3.9 million. The changes in the
fair value of the derivatives and the loss or gain on the hedged asset relating
to the risk being hedged are recorded currently in earnings.

INVENTORIES-- SLOW MOVING AND OBSOLESCENCE

     Significant management judgment is required to determine the reserve for
obsolete or excess inventory. Inventory on hand may exceed future demand either
because of process improvements or technology advancements, the amount on hand
is more than can be used to meet future need, or estimates of shelf lives may
change. We currently consider all inventory that we expect will have no activity
within one year as well as any additional specifically identified inventory to
be subject to a provision for excess inventory. We also provide for the total
value of inventories that we determine to be obsolete based on criteria such as
changing manufacturing processes and technologies. At June 30, 2003, our
inventory reserves were $1.7 million, or 50% of our $3.4 million total gross
inventories.

RESULTS OF OPERATIONS

Three and Six Months Ended June 30, 2003 and 2002

REVENUES. Revenues for the three months ended June 30, 2003 of $8.8 million
represented a decrease of $0.8 million as compared to revenues of $9.6 million
for the corresponding period of 2002. Revenues for the six months ended June 30,
2003 of $17.3 million represented a decrease of $2.4 million as compared to
revenues of $19.7 million for the corresponding period of 2002.


                                       11
<PAGE>

Product revenues decreased to $8.5 million for the quarter ended June 30, 2003,
from $9.1 million in the quarter ended June 30, 2002. Product revenues decreased
to $16.7 million for the six months ended June 30, 2003, from $18.6 million in
the six months ended June 30, 2002. The decrease in product sales during the
three and six months ending June 30, 2003 resulted from lower research product
sales compared to the corresponding periods of 2002.

Development revenues decreased to $0.3 million for the three months ended June
30, 2003, from $0.4 million for the three months ended June 30, 2002.
Development revenues decreased to $0.5 million for the six months ended June 30,
2003, from $0.8 million for the six months ended June 30, 2002. The decrease was
primarily due to a decrease in funding amounts per our development and
commercialization agreement with BML, Inc (BML). Under the agreement, we will
develop assays in accordance with a mutually agreed development program for use
in clinical applications by BML. This development is expected to be completed by
the end of 2003.

COST OF GOODS SOLD. Cost of goods sold consists of materials used in the
manufacture of product, depreciation on manufacturing capital equipment,
salaries and related expenses for management and personnel associated with our
manufacturing and quality control departments and amortization of licenses and
settlement fees. For the three months ended June 30, 2003, cost of goods sold
decreased to $3.4 million, compared to $6.6 million for the corresponding period
of 2002. For the six months ended June 30, 2003, cost of goods sold decreased to
$6.5 million compared to $14.3 million for the corresponding period in 2002. The
decrease was due to lower volume and lower fixed costs as a result of the
restructuring that occurred in the third quarter of 2002.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses consist
primarily of salaries and related personnel costs, material costs for assays and
product development, fees paid to consultants, depreciation and facilities costs
and other expenses related to the design, development, testing and enhancement
of our products and acquisition of technologies used or to be used in our
products. Research and development costs are expensed as they are incurred.
Research and development expenses for the three months ended June 30, 2003 were
$2.7 million, compared to $3.6 million for the corresponding period of 2002.
Research and development expenses for the six months ended June 30, 2003 were
$5.4 million, compared to $8.1 million for the six months ended June 30, 2002.
The decrease in research and development expenses was primarily attributable to
decreased material costs for assay and product development and a decrease in
fees paid for consulting, development, and other services.

SELLING AND MARKETING EXPENSES. Selling and marketing expenses consist primarily
of salaries and related personnel costs for our sales and marketing management
and field sales force, commissions, office support and related costs, and travel
and entertainment. Selling and marketing expenses for the three months ended
June 30, 2003 were $2.5 million, an increase of $0.3 million, as compared to
$2.2 million for the corresponding period of 2002. Selling and marketing
expenses for the six months ended June 30, 2003 were $4.9 million, an increase
of $0.1 million, as compared to $4.8 million for the corresponding period of
2002

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist
primarily of salaries and related expenses for executive, finance and other
administrative personnel, legal and professional fees, office support and
depreciation. General and administrative expenses decreased to $2.4 million in
the three months ended June 30, 2003, from $3.1 million for the corresponding
period in 2002. For the six months ended June 30, 2003 and 2002, general and
administrative expenses were constant at $5.8 million. The decrease in the three
month period ended June 30, 2003 was due to a decrease in personnel related
expenses and consulting fees compared to the corresponding period in 2002.

INTEREST INCOME. Interest income for the three months ended June 30, 2003 was
$0.2 million, compared to $0.3 million for the corresponding period of 2002.
Interest income for the six months ended June 30, 2003 was $0.3 million compared
to $0.6 million for the six months ended June 30, 2002. This decrease was
primarily due to lower interest rates and lower cash balances compared to the
three and six months ending June 30, 2002.

INTEREST EXPENSE. Interest expense for the three months ended June 30, 2003 was
approximately $0.1 million, compared to $0.3 million in the corresponding period
in 2002. Interest expense for the six months ended June 30, 2003 was $0.2
million compared to $0.7 million in the corresponding period in 2002. The
decrease in interest expense was primarily due to lower interest rates on debt.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations primarily through private
placements of equity securities, research grants from federal and state
government agencies, payments from strategic collaborators, equipment loans,
capital leases, sale of products, a



                                       12
<PAGE>

convertible note and an initial public offering. As of June 30, 2003, we had
cash and cash equivalents and short-term investments of $56.8 million.

     Net cash used in operations for the six months ended June 30, 2003 was $4.1
million, compared with $9.7 million in the corresponding period in 2002. The
decrease in cash used in operations was primarily due to lower operating losses.

     Net cash provided by investing activities for the six months ended June 30,
2003 was $0.2 million, compared to a cash usage of $1.5 million in the
corresponding period in 2002. Investing activities included capital expenditures
of $0.1 million in the six months ended June 30, 2003, compared to $1.8 million
in the corresponding period in 2002. Capital expenditures during 2002 were
higher due to investments in production and lab equipment.

     Net cash provided by financing activities was $0.4 million in the six
months ended June 30, 2003, compared to net cash used in financing activities of
$1.9 million in 2002. Cash used in financing activities in the six months ending
June 30, 2003 consisted of $13,000 to repay debt, compared to $1.3 million in
the corresponding period in 2002. Additionally, in the six months ending June
30, 2002, $0.8 million was used for capital lease obligation payments. During
2002, we entered into a term loan agreement due on July 31, 2003 to pay off the
then existing debt and capital lease obligations. Upon expiration, we will renew
the term loan for an additional year. The term loan is collateralized with a
12-month certificate of deposit.

     The following summarizes our contractual obligations at June 30, 2003 and
the effect those obligations are expected to have on our liquidity and cash flow
in future periods (in thousands):

<TABLE>
<CAPTION>
                                                                   TOTAL         LESS THAN        YEARS       YEARS       OVER
                                                                                  1 YEAR          1 - 3       4 - 5      5 YEARS
                                                                                 -----------   ---------   ---------  ----------
<S>                                                             <C>              <C>           <C>         <C>        <C>
                     CONTRACTUAL OBLIGATION
                     Non-cancelable operating
                     lease obligations                          $   18,157       $   1,823     $   4,091   $   4,552   $   7,691
                     Term loan                                       9,515           9,502            13          --          --
                                                                ----------       ---------     ---------   ---------   ---------
                     Total obligation                           $   27,672       $  11,325     $   4,104   $   4,552   $   7,691
                                                                ----------       ---------     ---------   ---------   ---------
</TABLE>

As of December 31, 2002 and June 30, 2003 , a valuation allowance equal to 100%
of our net deferred tax assets had been recognized since our future realization
is not assured. At December 31, 2002, we had federal and state net operating
loss carryforwards of approximately $103 million. The net operating loss
carryforwards will expire at various dates beginning in 2008, if not utilized.
Utilization of the net operating losses and credits to offset future taxable
income may be subject to an annual limitation due to the change of ownership
provisions of federal tax laws and similar state provisions as a result of the
initial public offering in February 2001.

We cannot assure you that our business or operations will not change in a manner
that would consume available resources more rapidly than anticipated. We also
cannot assure you that we will not require substantial additional funding before
we can achieve profitable operations. Our capital requirements depend on
numerous factors, including the following:

     o    our progress with our research and development programs;

     o    our level of success in selling our products and technologies;

     o    our ability to establish and maintain successful collaborative
          relationships;

     o    the costs we incur in enforcing and defending our patent claims and
          other intellectual property rights; and

     o    the timing of purchases of additional capital.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is currently confined to changes in foreign exchange
and interest rates. The securities in our investment portfolio are not leveraged
and, due to their short-term nature, are subject to minimal interest rate risk.
We currently do not hedge interest rate exposure. Due to the short-term
maturities of our investments, we do not believe that an increase in market
rates would have any negative impact on the realized value of our investment
portfolio.



                                       13
<PAGE>

To reduce foreign exchange risk, we selectively use financial instruments. Our
earnings are affected by fluctuations in the value of the U.S. dollar against
foreign currencies as a result of the sales of our products in foreign markets.
Forward foreign exchange contracts are used to hedge against the effects of such
fluctuations. Our policy prohibits the trading of financial instruments for
profit. A discussion of our accounting policies for derivative financial
instruments is included in the notes to the financial statements.

ITEM 4. CONTROLS AND PROCEDURES

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, the
Company's management, including the Company's Chief Executive Officer and Chief
Financial Officer, conducted an evaluation as of the end of the period covered
by this report, of the effectiveness of the Company's disclosure controls and
procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934. Based on that evaluation, the Company's Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures were effective as of the end of the period covered by this report. As
required by Rule 13a-15(d) under the Securities Exchange Act of 1934 the
Company's management, including the Company's Chief Executive Officer and Chief
Financial Officer, also conducted an evaluation of the company's internal
control over financial reporting to determine whether any changes occurred
during the quarter covered by this report that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting. Based on that evaluation, there has been no such change
during the quarter covered by this report.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933, as amended. When used in this Form 10-Q the words
"believe," "anticipates," "intends," "plans," "estimates," and similar
expressions are forward-looking statements. Such forward-looking statements
contained in this Form 10-Q are based on current expectations. Forward-looking
statements may address the following subjects: results of operations; customer
growth and retention; development of technologies; losses or earnings; operating
expenses, including, without limitation, marketing expense and technology and
development expense; and revenue growth. We caution investors that there can be
no assurance that actual results, outcomes or business conditions will not
differ materially from those projected or suggested in such forward-looking
statements as a result of various factors, including, among others, our limited
operating history, unpredictability of future revenues and operating results,
competitive pressures and also the potential risks and uncertainties set forth
in the "Overview" section hereof and in the "Overview" and "Risk Factors"
sections of our annual report on Form 10-K for the fiscal year ended December
31, 2002 filed with the Securities and Exchange Commission, which factors are
specifically incorporated herein by this reference. You should also carefully
consider the factors set forth in other reports or documents that we file from
time to time with the Securities and Exchange Commission. Except as required by
law, we undertake no obligation to update any forward-looking statements.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS - With the exception of the matters identified
         below, there are no material legal proceedings pending. From time to
         time, we may be involved in litigation relating to claims arising out
         of our operations in the usual course of business.

     On September 6, 2002 the Company filed a patent infringement action against
     Eragen Biosciences, Inc. in the United States District Court for the
     Western District of Wisconsin. The complaint alleged that the defendant
     infringed certain claims of the Company's U.S. Patent No. 6,348,314
     entitled "Invasive cleavage of nucleic acids" and U.S. Patent No. 6,090,543
     entitled "Cleavage of nucleic acids" based on Eragen's development and sale
     of products known as "Gene-Code" or similar technologies or products. The
     defendants answered the complaint on October 8, 2002 and asserted a
     counterclaim seeking declaratory judgment that Eragen has not infringed any
     valid claims of the Company patents at issue. On April 9, 2003, the Company
     and Eragen settled the litigation. Under the terms of the settlement
     agreement, Eragen agreed to cease and desist from the development and sale
     of certain Gene Code products and technologies and further agreed not to
     use or develop products or technologies employing invasive cleavage
     technologies. Eragen also agreed to a nonmaterial payment of cash to the
     Company. The Company agreed to dismiss the lawsuit against Eragen and
     issued a covenant not to sue under certain Company patents.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

                                       14
<PAGE>

     (1)  None

     (2)  None

     (3)  None

     (4)  Use of Proceeds. Pursuant to our Registration Statement on Form S-1,
          as amended, filed with the Securities and Exchange Commission and
          declared effective February 9, 2001, (Registration No. 333-42694), we
          commenced our initial public offering of 7,500,000 registered shares
          of common stock, $0.001 par value, on February 9, 2001, at a price of
          $11.00 per share (the "Offering"). The Offering was completed on
          February 14, 2001, and all of the 7,500,000 shares were sold,
          generating gross proceeds of approximately $82,500,000. The managing
          underwriters for the Offering were Lehman Brothers Inc., CIBC World
          Markets, Dain Rauscher Incorporated, Robert W. Baird & Co.
          Incorporated, and Fidelity Capital Markets.

          In connection with the Offering, we incurred approximately $5.8
          million in underwriting discounts and commissions, and approximately
          $1.9 million in other related expenses. The net offering proceeds to
          us, after deducting the foregoing expenses, were approximately $74.8
          million.

          From the time of receipt through June 2003, we have invested the net
          proceeds from the Offering in investment-grade, interest-bearing
          securities. We used $4.0 million of the proceeds to satisfy a
          cancellation fee for the termination of a distribution agreement with
          Endogen Corporation. We used approximately $14.0 million for general
          corporate purposes, including working capital and research and
          development activities.

          We expect to use the remainder of the net proceeds for general
          corporate purposes, including working capital and expanding research
          and development and sales and marketing efforts to accelerate the
          commercialization of new products and the development of new
          partnerships.

          A portion of the net proceeds may also be used to acquire or invest in
          complementary businesses or products to obtain the right to use
          complementary technologies. From time to time, in the ordinary course
          of business, we may evaluate potential acquisitions of these
          businesses, products, or technologies. We have no current agreements
          or commitments regarding any such transaction.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None.

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

         The 2003 Annual Meeting of Shareholders of the Company was held on June
10, 2003. The Company solicited proxies for the Annual Meeting pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended, and Regulation
14A thereunder.

         Three nominees, Messrs. John Neis, Sam Eletr, and Gordon F. Brunner
were elected for a term expiring at the Annual Meeting of Shareholders in 2006
and the appointment of Ernst & Young LLP as the independent auditors of the
Company for the year ending December 31, 2003 was ratified. The vote for Mr.
Neis was 32,291,468 shares for and 551,158 shares to withhold authority, the
vote for Mr. Eletr was 32,551,645 shares for and 290,981 shares to withhold
authority and the vote for Mr. Brunner was 32,553,195 shares for and 289,431
shares to withhold authority. The vote for the ratification of the appointment
of Ernst & Young LLP was 32,064,786.

ITEM 5. OTHER INFORMATION - None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits.

          31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
          31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
          32   Section 1350 Certifications

     (b)  Reports on Form 8-K filed during the three months ended June 30, 2003:
          The Company filed a Form 8-K dated April 24, 2003 reporting under
          Items 7 and 9 of Form 8-K the Company's press release dated April 24,
          2003 announcing the Company's first quarter results.




                                       15
<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.

                                                THIRD WAVE TECHNOLOGIES, INC.

Date: August 14, 2003                           By: /s/ Lance Fors
                                                    ----------------------------
                                                Lance Fors, CEO

Date: August 14, 2003                           By: /s/ John Puisis
                                                    ----------------------------
                                                John Puisis, CFO


                                       16