<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 March 31, 2002 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 Identification No.)
of incorporation or organization)

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 [ ]

The number of shares outstanding of the registrant's Common Stock, $.001 par
value, as of March 31, 2002, was 39,402,351.



<PAGE>


                          THIRD WAVE TECHNOLOGIES, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2002

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                   Page No.
                                                                                                   --------
<S>                                                                                                <C>
PART I   FINANCIAL INFORMATION..................................................................      1

     Item 1.  Financial Statements..............................................................      1

         Balance Sheets as of March 31, 2002 and December 31, 2001..............................      1

         Statements of Operations for the three months ended March 31, 2002 and 2001............      2

         Statements of Cash Flows for the three months ended March 31, 2002 and 2001............      3

         Notes to Financial Statements..........................................................      4

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

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk........................     10

PART II  OTHER INFORMATION......................................................................     11

     Item 1. Legal Proceedings..................................................................     11

     Item 2. Changes In Securities And Use Of Proceeds..........................................     11

     Item 3. Defaults Upon Senior Securities....................................................     11

     Item 4. Submission Of Matters To A Vote Of Security Holders................................     11

     Item 5. Other Information..................................................................     11

     Item 6. Exhibits And Reports On Form 8-K...................................................     11

SIGNATURES......................................................................................     12
</TABLE>

<PAGE>
                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                          THIRD WAVE TECHNOLOGIES, INC.
                                 Balance Sheets


<TABLE>
<CAPTION>
                                                                                     MARCH 31,          DECEMBER 31,
                                                                                       2002                2001
                            ASSETS                                                  (UNAUDITED)          (AUDITED)
                                                                                   -------------       -------------
<S>                                                                                <C>                 <C>
Current assets:
  Cash and cash equivalents                                                        $   5,230,493       $   1,807,372
  Short-term investments                                                              61,297,401          71,491,751
  Receivables
     Trade, net of allowance for doubtful accounts of
       $175,000 at March 31, 2002 and December 31, 2001                                5,134,894           1,829,122
  Inventories                                                                          4,746,605           6,448,974
  Prepaid expenses and other                                                           1,926,593           2,308,003
                                                                                   -------------       -------------
Total current assets                                                                  78,335,986          83,885,222
Equipment and leasehold improvements
  Machinery and equipment                                                             31,300,442          30,848,712
  Leasehold improvements                                                               8,312,749           7,597,235
                                                                                   -------------       -------------
                                                                                      39,613,191          38,445,947
  Less accumulated depreciation                                                       13,062,105          10,864,634
                                                                                   -------------       -------------
                                                                                      26,551,086          27,581,313
Intangible assets                                                                     14,722,366          15,431,620
Other assets                                                                           4,401,710           4,716,427
                                                                                   -------------       -------------

         Total assets                                                              $ 124,011,148       $ 131,614,582
                                                                                   =============       =============


             LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                                                 $  12,111,070       $  11,276,955
  Accrued expenses and other liabilities                                               1,827,501           1,976,799
  Deferred revenue                                                                     1,393,460           1,535,951
  Long-term debt due within one year                                                   2,706,139           2,618,359
  Capital lease obligations due within one year                                        1,697,219           1,643,372
                                                                                   -------------       -------------
Total current liabilities                                                             19,735,389          19,051,436
Deferred revenue                                                                         666,667             916,667
Long-term debt                                                                         3,253,289           3,966,620
Other                                                                                    200,000             200,000
Capital lease obligations                                                              2,282,030           2,727,070

Shareholders' equity:
  Participating preferred stock, Series A, $.001 par value, 10,000,000 shares
     authorized, 0 shares issued and outstanding                                            --                  --
  Common stock, $.001 par value, 100,000,000 shares
     authorized, respectively 39,402,351 and 39,374,014
     shares issued and outstanding, respectively                                          39,402              39,374
  Additional paid-in capital                                                         191,453,883         191,426,698
  Deferred stock compensation                                                         (1,449,554)         (1,861,566)
  Accumulated deficit                                                                (92,169,958)        (84,851,717)
                                                                                   -------------       -------------

         Total shareholders' equity                                                   97,873,773         104,752,789
                                                                                   -------------       -------------

         Total liabilities and shareholders' equity                                $ 124,011,148       $ 131,614,582
                                                                                   =============       =============
</TABLE>


See accompanying notes to financial statements.


                                      -1-
<PAGE>
                          THIRD WAVE TECHNOLOGIES, INC.

                            Statements of Operations
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                        MARCH 31,
                                                                 2002               2001
                                                             ------------       ------------
<S>                                                          <C>                <C>
Revenues:
   Product sales                                             $  9,371,424       $ 10,173,427
   Development revenue                                            500,001            860,000
   Grant revenue                                                  256,202            139,191
                                                             ------------       ------------
Total revenues                                                 10,127,627         11,172,618
                                                             ------------       ------------
Operating expenses:
   Cost of goods sold
       Product cost of goods sold (see note 5)                  7,194,817          9,603,766
       Intangible amortization                                    482,640            482,640
                                                             ------------       ------------
   Total cost of goods sold                                     7,677,457         10,086,406

   Research and development (see note 5)                        4,446,782          2,863,842
   Selling and marketing (see note 5)                           2,613,674          2,371,390
   General and administrative (see note 5)                      2,710,878          2,401,126
                                                             ------------       ------------
                                                                9,771,334          7,636,358
                                                             ------------       ------------

Total operating expenses                                       17,448,791         17,722,764
                                                             ------------       ------------
Loss from operations                                           (7,321,164)        (6,550,146)

Other income (expense):

   Interest income                                                299,118          1,017,784
   Interest expense                                              (355,457)          (348,168)
   Other                                                           59,262             15,341
                                                             ------------       ------------
Other income (expense):                                             2,923            684,957
                                                             ------------       ------------
Net loss attributable to common shareholders                 $ (7,318,241)      $ (5,865,189)
                                                             ============       ============

Basic and diluted net loss per share  (see note 2)           $      (0.19)      $      (0.20)

Shares used in computing basic and diluted net loss per        39,379,511         28,738,755
</TABLE>


See accompanying notes to financial statements.


                                      -2-
<PAGE>
                          THIRD WAVE TECHNOLOGIES, INC.

                            Statements of Cash Flows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED
                                                                                MARCH 31,
                                                                     -------------------------------
                                                                         2002               2001
                                                                     ------------       ------------
OPERATING ACTIVITIES:
<S>                                                                  <C>                <C>
Net loss                                                             $ (7,318,241)      $ (5,865,189)
Adjustments to reconcile net loss to net cash used in operating
   activities:
   Depreciation and amortization                                        3,035,277          1,750,673
   Noncash stock compensation                                             412,012            960,879
   Amortization of deferred gain                                           (4,200)                 0
   Changes in operating assets and liabilities:
      Receivables                                                      (3,305,772)        (9,558,762)
      Inventories                                                       1,702,369         (1,176,391)
      Prepaid expenses and other assets                                   559,775           (148,006)
      Accounts payable                                                    834,115          4,202,629
      Accrued expenses and other liabilities                             (137,298)           203,134
      Deferred revenue                                                   (392,491)         2,957,213
                                                                     ------------       ------------
Net cash provided by (used in) operating activities                    (4,614,454)        (6,673,820)
                                                                     ------------       ------------

INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements                      (1,167,244)        (6,739,196)
Purchase of short-term investments                                     (4,267,467)       (85,743,678)
Sales of short-term investments                                        14,461,817         14,381,079
                                                                     ------------       ------------
Net cash provided by (used in) investing activities                     9,027,106        (78,101,795)
                                                                     ------------       ------------

FINANCING ACTIVITIES:
Payments on long-term debt                                               (625,551)        (2,189,315)
Proceeds from common stock, net                                            27,213         74,685,126
Payments on capital lease obligations                                    (391,193)                 0
                                                                     ------------       ------------
Net cash provided by (used in) financing activities                      (989,531)        72,495,811
                                                                     ------------       ------------
Net change in cash and cash equivalents                                 3,423,121        (12,279,804)
Cash and cash equivalents at beginning of period                        1,807,372         14,046,484
                                                                     ------------       ------------
Cash and cash equivalents at end of period                           $  5,230,493       $  1,766,680
                                                                     ============       ============
</TABLE>


See accompanying notes to financial statements.


                                      -3-
<PAGE>
                          THIRD WAVE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                             March 31, 2002 and 2001
                                   (unaudited)

(1) Basis of Presentation

The accompanying unaudited 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, 2002.

The balance sheet at December 31, 2001 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 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, 2001 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, convertible preferred
stock, and convertible note payable, are not included because they are
antidilutive for the periods presented.

(3)  Initial Public Offering

In February 2001, we completed our initial public offering of 7,500,000 shares
of common stock at a price of $11.00 per share (excluding underwriters'
discounts and commissions), generating gross proceeds of approximately $82.5
million and net proceeds of $74.8 million, after deducting an aggregate of $7.7
million in underwriting discounts, commissions, and other offering related
expenses. All shares of Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D
Convertible Preferred Stock, Series E Convertible Preferred Stock, and Series F
Convertible Preferred Stock outstanding as of the closing date of the offering
were automatically converted into shares of common stock. No dividends were paid
on any of the Series A, B, C, D, E, or F Convertible Preferred Stock. We expect
to use the proceeds from the offering for capital expenditures, and general
corporate purposes, including working capital and research and development
activities.

(4)  Inventory

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.


                                      -4-
<PAGE>
Inventory consists of the following:


<TABLE>
<CAPTION>
                                                March 31,        December 31,
                                                  2002              2001
                                               -----------       -----------
<S>                                            <C>               <C>
Raw material                                   $ 6,201,621       $ 6,963,240
Finished goods and work in process               1,224,984         2,165,734
Reserve for excess and obsolete inventory       (2,680,000)       (2,680,000)
                                               -----------       -----------

Total inventory                                $ 4,746,605       $ 6,448,974
                                               ===========       ===========
</TABLE>


 (5) Stock Compensation

Included in operating expenses are the following stock compensation charges:


<TABLE>
<CAPTION>
                                                    Three Months Ended
                                                ----------------------------
                                                March 31,           March 31,
                                                  2002                2001
                                                --------            --------
<S>                                             <C>                 <C>
Cost of goods sold                              $ 75,871            $185,012
Research and development                          40,447              91,978
Selling and marketing                             16,808              42,963
General and administrative                       278,886             640,926
                                                --------            --------

            Total stock compensation            $412,012            $960,879
                                                ========            ========
</TABLE>


 (6) Derivative Instruments

In September 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," as amended,
which was adopted by the Company on January 1, 2001. This Statement requires
that all derivatives be recorded in the balance sheet at fair value and that
changes in fair value be recognized currently in earnings unless specific hedge
accounting criteria are met. There was no cumulative effect of adoption because
the Company did not have any derivative financial instruments on January 1,
2001.

The Company sells its products in a number of countries throughout the world. In
the quarter ending March 31, 2002, the Company sold certain products with the
resulting accounts receivable denominated in Japanese Yen. Simultaneous with
such sales and purchase order commitments, the Company purchased foreign
currency forward contracts to manage the risk associated with foreign currency
collections 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, which arise when collections in a foreign currency
are received after the asset is generated. Contracts outstanding at March 31,
2002 represented a combined U.S. dollar equivalent commitment of approximately
$6.5 million. The changes in the fair value of the Company's derivatives and the
loss or gain on the hedged asset relating to the risk being hedged are recorded
currently in earnings. An unrealized loss on the forward contracts and an
offsetting unrealized gain on the underlying hedged transactions were recorded
as a liability and asset, respectively, in the financial statements.

(7) Reclassifications

Certain reclassifications have been made to the 2001 financial statements to
conform to the 2002 presentation.


                                      -5-
<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 March 31, 2002 and for the three months ended March 31, 2002
and 2001 should be read in conjunction with our Form 10-K for the fiscal year
ended December 31, 2001 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 develops, manufactures and markets genetic analysis
products used in the discovery and validation of the genetic basis of disease
and the delivery of personalized medicine.

Our patented Invader product platform is highly accurate, sensitive, easy to use
and cost-effective, enabling the acceleration of genome and pharmaceutical
research and clinical patient analysis.

We have established strategic collaborations in the U.S. and abroad with
government initiatives, pharmaceutical and biotechnology companies, academic
research centers, clinical reference labs and major healthcare providers. We are
focused on high-volume opportunities with customers and collaborators in
large-scale disease association studies, drug response marker profiling and
molecular diagnostics.

A large suite of Third Wave's turnkey Invader platform products are or will be
available in a variety of formats to meet the needs of our customers including
analyte specific reagents for routine clinical use and a large number of
products for research use. We have also introduced its first series of Invader
RNA Assay products for measuring the expression levels of genes with proven
clinical relevance. We will launch additional products for genotyping and gene
expression analysis. These products will be available in flexible formats and
include genome-wide screening and medically associated panels including
disease-specific panels, microsatellite replacement panels and assays for
quantitating a number of infectious diseases and mRNA transcripts, including
drug metabolizing enzymes, cytokines, chemokines, growth factors and
housekeeping and reporter genes.

Invader products are compatible with existing automation processes and detection
platforms and are available in convenient, ready-to-use formats. These
advantages make Invader products ideally suited for both small-scale and
large-scale genetic analysis in research and clinical applications, including
drug discovery and development and patient diagnosis and treatment. Our
proprietary products and technologies position us to exploit the growing market
opportunity for genetic analysis products.

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 and manufacturing capabilities.


                                      -6-
<PAGE>
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.

LONG-LIVED ASSETS--IMPAIRMENT

Equipment, leasehold improvements and 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, 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 or abandoned we estimate the fair market
value of such assets and record an adjustment if fair market value is lower than
carrying value.

DERIVATIVE INSTRUMENTS

We sell products in a number of countries throughout the world. During 2001 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. There were contracts outstanding at March 31, 2002 amounting to $6.5
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.

SIGNIFICANT CUSTOMER

We generated approximately $7.5 million of our revenues from sales to one
end-user customer in the Japanese government during the quarter ended March 31,
2002. As of March 31, 2002, $3.5 million of our accounts receivable were
attributable to this customer. If our primary customer would experience
significant adverse conditions, they may not be able to complete the purchase of
additional products from us under the terms of our existing firm sale
commitments.

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 March 31, 2002, our
inventory reserves were $2.7 million, or 36% of our $7.4 million total gross
inventories.


                                      -7-
<PAGE>
RESULTS OF OPERATIONS

Three Months Ended March 31, 2002 and 2001

REVENUES. Revenues for the three months ended March 31, 2002 of $10.1 million
represents a decrease of $1.1 million as compared to revenues of $11.2 million
for the corresponding period of 2001.

Product revenues decreased to $9.4 million for the quarter ended March 31, 2002,
from $10.2 million in the quarter ended March 31, 2001. Product sales during the
three month period ending March 31, 2001 were above expectations as our largest
customer accelerated its purchases of our proprietary Cleavase enzyme. The
customer uses the enzyme in conjunction with previously delivered Invader SNP
probes sets, as well as those planned to be delivered over the remainder of the
project.

Development revenues decreased to $0.5 million for the three months ended March
31, 2002, from $0.9 million for the three months ended March 31, 2001. The
decrease is primarily due to a scheduled decrease in funding amounts per the
agreement for development work being done on a development and commercialization
agreement with BML, Inc. 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
the 2003 calendar year.

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 March 31, 2002, cost of goods sold
decreased to $7.7 million compared to $10.1 million for the corresponding period
of 2001. The decrease was due to lower variable costs due to lower product sales
and improved operational efficiencies.

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 March 31, 2002 were
$4.4 million, compared to $2.9 million for the corresponding period of 2001. The
increase in research and development expenses for the three month period of $1.5
was primarily attributable to increased expenses associated with additional
research and development personnel, increased purchases of laboratory supplies,
increased equipment depreciation, increased material costs for assay and product
development, and increased facilities expenses in connection with the expansion
of our internal and collaborative research efforts.

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
March 31, 2002 were $2.6 million, an increase of $0.2 million, as compared to
$2.4 million for the corresponding period of 2001. We attribute this increase to
the hiring of additional personnel and increased costs associated with
establishing and commercializing our clinical and genomic business units.

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 increased to $2.7 million in
the three months ended March 31, 2002, from $2.4 million for the corresponding
period in 2001. The increase is due to the hiring of additional personnel to
support our growing business activities, increased facilities expenses, and
increased costs associated with operating a public company.


                                      -8-
<PAGE>


INTEREST INCOME. Interest income for the three months ended March 31, 2002, was
$0.3 million, compared to $1.0 million for the corresponding period of 2001.
This decrease was primarily due to lower interest rates compared to the three
month period ending March 31, 2001.

INTEREST EXPENSE. Interest expense for the three months ended March 31, 2002 was
approximately $0.4 million compared to $0.3 million in the corresponding period
in 2001. The increase in interest expense was due to additional debt related to
the capital equipment financing completed in the later periods of 2001.


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 convertible note and an initial public
offering. As of March 31, 2002, we had cash and cash equivalents and short-term
investments of $66.5 million.

In February 2001, we completed our initial public offering of 7,500,000 shares
of common stock at a price of $11.00 per share (excluding underwriters'
discounts and commissions), generating net proceeds of approximately $74.8
million.

Net cash used in operations for the three months ended March 31, 2002 was
approximately $4.6 million, compared with approximately $6.7 million for the
comparable period in 2001. Non-cash charges in the three months ended March 31,
2002 included stock compensation expense of $0.4 million and depreciation and
amortization expense of $3.0 million. The change in operating assets and
liabilities for the three months ended March 31, 2002 included an increase in
accounts receivable of $3.3 million, a decrease in inventory of $1.7 million, a
decrease in prepaid expenses and other assets of $0.6 million, an increase in
accounts payable of $0.8 million, a decrease in accrued liabilities of $0.1
million and a decrease in deferred revenue of $0.4 million. Investing activities
included $1.2 million for purchases of capital equipment and $10.2 million for
the net sale of short-term investments. Financing activities for the three
months ended March 31, 2002 included the use of $0.6 million to repay debt, $0.4
million for capital lease obligations and net proceeds from the issuance of
common stock from the exercise of stock options of less than $0.1 million.

As of December 31, 2001, 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, 2001, we had federal and state net operating loss carryforwards of
approximately $77.9 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.

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:

     -    our progress with our research and development programs;

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

     -    our ability to establish and maintain successful collaborative
          relationships;

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

     -    the timing of purchases of additional capital.


                                      -9-
<PAGE>
SUBSEQUENT EVENT

In April 2002, we developed and announced a strategy designed to streamline and
simplify the company's product development and manufacturing operations,
increase its gross margins, reduce its operating expenses and enable it to
develop markets and move more aggressively towards profitability. The strategy
includes an expansion of the company's sales and marketing presence and a
continuation of its ongoing product development activities. It also included an
approximately 25 percent reduction in the company's work force and significantly
lower capital needs during 2002.



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.

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.

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, 2001 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.


                                      -10-
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS - None. From time to time, we may be involved
        in litigation relating to claims arising out of our operations in the
        usual course of business.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

        (a) None

        (b) None

        (c) None

        (d) 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 March 2002, 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 $4.3 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 - None.

ITEM 5. OTHER INFORMATION - None.

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

        (a) Exhibits Required by Item 601 of Regulation S-K - None.

        (b) Reports on Form 8-K filed during the three months ended March 31,
            2002 - None.


                                      -11-
<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: May 15, 2002                          By: /s/ Lance Fors
                                               ---------------------------------
                                            Lance Fors, CEO

Date: May 15, 2002                          By: /s/ John Comerford
                                               ---------------------------------
                                            John Comerford, Vice President and
                                            General Counsel

Date: May 15, 2002                          By: /s/ John Puisis
                                               ---------------------------------
                                            John Puisis, CFO


                                      -12-