FORM 10-K
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

                    For the fiscal year ended: July 31, 2009

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

       For the transition period from _______________ to ________________

                         Commission file number 0-11485

                         ACCELR8 TECHNOLOGY CORPORATION
                         ------------------------------
                (Name of Registrant as Specified in its Charter)

               Colorado                                 84-1072256
               ---------                                ----------
     (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)                 Identification No.)

              7000 North Broadway, Building 3-307, Denver, CO 80221
              -----------------------------------------------------
                    (Address of principal executive offices)

                  Registrant's telephone number: (303) 863-8088

          Securities registered pursuant to Section 12(b) of the Act:

(Title of class)                           Name of Exchange on which registered
----------------                           ------------------------------------
Common Stock, no par value                 NYSE Amex Equities

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined by Rule 405 of the Securities Act [ ] Yes [X] No

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15 (d) of the Act. [X] Yes [ ] No

Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the 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 [ ]

<PAGE>

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

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section
229.405 of this Chapter) during the preceeding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes [X]
No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
definition of "large accelerated filer", "accelerated filer" and "small
reporting company" Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]
Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a small reporting company)
Small reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act) Yes [ ] No [X]

The Registrant's revenues for the fiscal year ended July 31, 2009 were
$1,269,886.

The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of January 30, 2009 was approximately $22,065,113 based upon the
last reported sale on that date. For purposes of this disclosure, Common Stock
held by persons who hold more than 5% of the outstanding voting shares and
Common Stock held by officers and directors of the Registrant have been excluded
in that such persons may be deemed to be "affiliates" as that term is defined
under the rules and regulations promulgated under the Securities Act of 1933, as
amended. This determination is not necessarily conclusive.

The number of shares of the Registrant's Common Stock outstanding as of October
26, 2009 was 10,226,210.

Documents incorporated by reference: None






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                                TABLE OF CONTENTS





FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 10-K contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the Company, as defined below, intends that
such forward-looking statements be subject to the safe harbors created thereby.
These forward-looking statements include the plans and objectives of management
for future operations, including plans and objectives relating to the products
and future economic performance of the Company. The forward-looking statements
included herein are based on current expectations that involve a number of risks
and uncertainties. These forward-looking statements are based on assumptions
that the Company will retain key management personnel, that the Company's
operating expenses will not materially increase, and that there will be no
material adverse change in the Company's operations or business. Assumptions
relating to the foregoing involve judgments with respect to, among other things,
future economic, competitive and market conditions and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond the control of the Company. Although the Company
believes that the assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could prove inaccurate and, therefore, there
can be no assurance that the results contemplated in the forward-looking
statements will be realized. Although management believes that the assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could prove inaccurate and, therefore, there can be no assurance that the
results contemplated in forward-looking information will be realized. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In addition, as disclosed elsewhere in this Annual Report, the business and
operation of the Company are subject to substantial risks that increase the
uncertainty inherent in such forward-looking statements. In light of the
significant uncertainties inherent in the forward-looking information included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives or plans
of the Company will be achieved.

                                        1
<PAGE>

                                     PART I
Item 1. Business

History and Development of the Company

     Accelr8 Technology Corporation ("Accelr8" or "the Company"), a Colorado
corporation, was incorporated on May 26, 1982. The Company's office and
laboratory are located at 7000 North Broadway, Building 3-307, Denver, Colorado
80221, and our telephone number is 303-863-8088.

     On January 18, 2001, we acquired the OpTest portfolio of technologies
("OpTest") from DDx, Inc. ("DDx"). Since the acquisition of the OpTest assets,
we have focused primarily upon furthering the research and development of the
acquired technologies, and the development of revenue producing products related
to that technology. The purchase of OpTest provided us with a proprietary
surface chemistry formulation and quantitative bio-analytical measurement
instruments. We have supplemented these assets to develop the BACcel(TM)
technology platform for applications related to rapid identification of bacteria
and their antibiotic resistance.

     Before our acquisition of the OpTest portfolio of technologies, we provided
software tools and consulting services for system modernization solutions for
Digital Equipment Corporation's VMS legacy systems. On July 30, 2004, we
completed the sale of the assets related to the software business.

Business Strategy

     Our vision is to develop and commercialize an innovative, integrated system
to rapidly identify bacteria and their mechanisms of antibiotic resistance in
critically ill patients. Our business strategy for primary products in vertical
markets is to prove the validity of our technology and recruit an industry
leader as a commercial partner or licensee. We also plan to spin off specific
OEM technology components through additional licensed applications that do not
compete with our platform licensees.

     We envision our continuing role as licensor and alliance partner as one of
leading the technical development of new technology, validating the application
methods, expanding platform applications, and integrating additional
capabilities into our proprietary platforms.

Application: Hospital-Acquired Infection (HAI)

     Every 6 minutes another American dies from a hospital-acquired infection
(HAI). The US Centers for Disease Control and Prevention estimates that 98,987
HAI fatalities occur annually that are attributable to bacterial infections
acquired in a US healthcare facility. HAI occurs when a patient enters the
hospital for some reason other than an infectious disease, then contracts
infection more than two days after admission. The HAI mortality rate is more
than double that from auto fatalities, far more than any type of cancer except
lung cancer, and more than seven and one-half times that from AIDS. Despite
intensive efforts to improve prevention and care, the mortality rate has
remained the same for more than ten years.

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<PAGE>

     Yet, in theory, none of these patients should die. An effective antibiotic
exists for almost every one of them. Even though bacterial strains exist that
resist any particular drug, strains that resist all antibiotics remain
fortunately rare.

     Lab delay is a major culprit. Medical experts believe that inadequate
initial therapy substantially elevates the risk of severe morbidity and
mortality in critically ill patients. For critically ill patients, the physician
must start antibiotics within 2-4 hours of symptom onset. But lab cultures
typically take 2-3 days to identify organisms and assess their antibiotic
susceptibility. The physician has no choice but to start therapy without knowing
the organism or its drug susceptibility. Most often, the physician must choose a
combination of two or three broad-spectrum antibiotics, based on the patient's
history, clinical indicators, and the hospital's recent history of antibiotic
effectiveness in similar infections. Unfortunately, widespread and increasingly
complex multiple antibiotic resistance causes such empiric therapy to prove
inadequate in 20% to 40% of cases.

     Further, switching to adequate therapy as soon as the next day fails to
improve outcomes. Once an infection passes a critical point, antibiotics have
little to no impact on its condition.

     Management believes that the development of new classes of antibiotics has
almost stopped. Improved prevention and infection control have limited
potential. In the meantime, bacteria continue to evolve and share emerging
mechanisms of drug resistance. Bacteria have become so well adapted to the
hospital that even the best preventive efforts do not eradicate them. Hospitals
that lead in best preventive practices still suffer from endemic
hospital-adapted strains that continue to cause high rates of attributable
morbidity and mortality. Such examples suggest that each passing year sees a
reduction in the number of cases that can be treated successfully with any
particular drug.

     Management believes that dramatically speeding up laboratory diagnostics
will help to improve the success rate for initial therapy.

Products

BACcel(TM) System Development

     We are developing an innovative rapid diagnostic platform, the BACcel(TM)
system, intended for rapid diagnosis in life-threatening bacterial infections.
Our goal is to reduce the failure rate of initial therapy by shortening the lab
turnaround time to less than 8 hours, rather than the 2-3 days now required.
Rapid testing would provide guidance in time to influence initial therapy.

                                       3
<PAGE>

     The BACcel(TM) system applies our proprietary technology to eliminate
time-consuming bacterial culturing, thus eliminating the major source of delay
with current testing methods. Proprietary technologies include our patented
"Quantum Microbiology(TM) " analytical methods, and our patented OptiChem(R)
surface coatings.

     The BACcel(TM) system uses long-accepted bacteriological testing
principles, but applies our proprietary technology to adapt them to analyze live
bacteria extracted directly from a patient specimen. The instrumentation uses an
automated digital microscope to measure the responses of extracted live
bacterial cells to various test conditions. The system analyzes thousands of
these individual cells to arrive at organism identification and antibiotic
resistance characteristics.

     Based on internal lab data, Management believes that the BACcel(TM) system
will identify the organisms present in a patient's specimen and count the number
of organisms of each type in less than 2 hours after receiving a specimen.
Management believes that the BACcel(TM) system will then additionally report
major categories of antibiotic resistance mechanism present for each type of
organism within a total of 4-6 hours after receiving a specimen. The clinical
purpose of this version is to narrow the drug choices available for initial
therapy by rapidly reporting presumptive identification and major resistance
types, thus ruling out antibiotic classes that are most likely to fail.

     Quantitative identification in less than 2 hours also enables
near-real-time assessment of the effects of therapy, and monitoring for emerging
resistance or secondary infection.

     Popular news media have reported widely about methicillin-resistant
Staphylococcus aureus ("MRSA") as a multi-resistant "superbug." However,
organizations such as the US Centers for Disease Control and Prevention ("CDC")
and the Infectious Diseases Society of America have also identified other
multi-drug resistant organisms as presenting even greater threats. They include
Pseudomonas, Acinetobacter, E. coli, and Klebsiella. In the hospital intensive
care unit ("ICU"), MRSA typically causes no more than about 30% of mortality
from acquired infections. The other organisms account for a much higher
percentage.

     Management believes that the BACcel(TM) system is the only new diagnostic
technology to address a clinically adequate range of species and antibiotic
resistance mechanisms needed to help manage critical infectious diseases.
Management also believes that other rapid technologies, such as gene detection,
are better suited to screening non-infected carriers of a small number of
species and resistance mechanisms, but are too limited to compete with the
BACcel(TM) platform for managing infected patients.


                                        4
<PAGE>

Additional Products

     In addition to BACcel(TM) system development, we have developed and
out-licensed OptiChem(R) surface coatings for use in microarraying components.
As a coating for analytical devices, management believes that OptiChem(R) offers
superior noise rejection (non-specific binding by interfering substances) and
high capacity for target binding, compared with other bio-coatings. For example,
in microarraying this results in higher sensitivity and simplified sample
preparation. OptiChem(R) also offers the ability to apply micro-patterns,
enabling novel advanced analyzer designs. The coating is widely adaptable to
virtually any base material, such as plastics, and even highly sophisticated
designs can be economically scaled to high-volume production. We have licensed
various OptiChem(R) microarraying coatings to SCHOTT (Germany) and NanoString
(WA). See "Sales, Licensing, and Alliances" below.

     In this business segment we provide development services to potential
licensees and industrial customers. For these customers, we also produce limited
quantities of new products for technical and market evaluations.

     Patented OptiChem(R) coatings have potential value in other applications as
well. When appropriate, we fund limited technical projects with outside
organizations or adapt our own development to assess feasibility. Examples
include:

     o    Analytical devices such as molecular sensors;
     o    Tissue and cell culturing labware for live-cell analysis;
     o    Invasive medical devices to reduce bacterial biofilm formation;
     o    Patient specimen containers to reduce loss of critical analytes;
     o    Pharmaceutical packaging to extend shelf life and reduce the loss of
          costly biotech drugs; and
     o    Coatings to prevent bio-fouling (microbial mat formation and
          corrosion) in a variety of industrial and commercial applications.

Research and Development

     The BACcel(TM) system includes a fixed instrument and proprietary
single-use (disposable) test cassettes. Each cassette tests a single patient
specimen and then must be discarded.

         We have used two laboratory prototype instruments in our development
laboratory for over three years. Early in calendar 2008, we placed two
additional, identical research prototype systems in collaborating research
institutions: Denver Health Medical Center, and Barnes-Jewish Hospital at
Washington University in St. Louis. The two institutions have replicated and
extended the Company's own research using analytical methods developed by the
Company. Management believes that the joint studies will continue and may be
presented periodically to the relevant scientific and medical communities. Since
2006, we have made technical presentations at major national scientific and
clinical congresses. We intend to continue our presentation and publication
program as a permanent part of our business development program.

                                       5
<PAGE>

     In May 2008 we began a technical development project with funding from
Becton, Dickinson and Company ("BD," NYSE: BDX). BD is an industry leader in
manufacturing diagnostic products used in hospital laboratories for Clinical
Microbiology. As part of the project agreement, BD also obtained an option to
purchase a royalty-bearing global exclusive license for technology application
in human infectious diseases. BD and Accelr8 defined technical milestone
objectives, and subjected the BACcel(TM) technology to a milestone test in
August 2009. Test results exceeded the milestone criteria. However, BD declined
the option on September 24, 2009 citing reasons unrelated to platform technology
performance and as result, we will not receive any further technical development
fees from BD.

     In ongoing technical development, our internal technical team design the
analytical methods and validate them through well-controlled experiments.
Studies included comparison between standard methods and BACcel(TM) system
results on well-characterized bacterial strains and clinical patient specimens.

     In addition to developing analytical methods, we develop custom antibodies
for species identification. Commercial antibody sources do not exist for some of
the species contained in our bacterial panels. In other cases, commercial
sources cannot provide antibodies that meet our performance criteria. We believe
that custom antibodies derived from this development program have added
significant asset value and competitive advantages. In this program we own the
antibodies and any intellectual property that may emerge as a result of our
proprietary antibody development methods.

     As an example of the success of our innovative antibody development
process, we have scaled up unique antibodies against Acinetobacter baumannii and
Staphylococcus aureus. Acinetobacter can be one of the most highly resistant
pathogens and is difficult to analyze. It often causes major outbreaks in
hospitals, and has become a major problem with casualties wounded in Iraq and
Afghanistan. Our novel antibody makes it possible to rapidly detect the organism
using simple test kits as well as playing a key role in the BACcel(TM) system.

     We are also developing OptiChem(R) coating methods for use in BACcel(TM)
cassette production. We plan to use OptiChem(R) to prevent bacteria from
adhering to flow channel walls and being lost to analysis, and in a target zone
to immobilize bacteria where the system's automated microscope views them.

     Academic collaborators have published research papers in scientific
journals and made presentations at international professional organization
meetings concerning OptiChem(R) applications and characteristics.

     During the fiscal years ended July 31, 2009 and 2008, we spent $745,927 and
$880,984 respectively, on research and development activities.

                                       6
<PAGE>

Sales, Licensing, and Alliances

     The Company originally signed a licensing agreement for microarraying
slides using OptiChem(R) coatings with Schott Jenaer Glas GmbH ("SCHOTT") on
November 4, 2004.

     On November 24, 2008 the Company extended a non-exclusive Slide H license
to SCHOTT for three additional years, to expire on November 23, 2010. The
Company previously granted a royalty-bearing license to Schott Jenaer Glas GmbH
for Streptavidin slides (Slide HS) for two years that expired on December 31,
2008.

     On October 5, 2007, the Company additionally entered into an exclusive
seven-year license with NanoString Technologies, Inc. The license grants
NanoString the right to apply OptiChem(R) coatings to NanoString's proprietary
molecular detection products.

     In addition, from time to time we may enter into other types of funded
development agreements for custom OptiChem(R) coatings. Part of such
relationships may include supply agreements for prototype and pilot
manufacturing of the resulting products.

     Management believes that microarray substrate and other OptiChem(R) related
sales will continue at or near levels experienced in the past, and that there
will be nominal royalties and licensing fees with SCHOTT in the next fiscal
year; however, there can be no assurance that sales will occur or that revenues
will be generated.

     During the fiscal year ended July 31, 2009, total revenues from BD were
$1,200,000 or 94.49% of total revenues and revenues from SCHOTT were $67,212 or
5.29% of total revenues. During the fiscal year ended July 31, 2008, total
revenues from BD were $300,000 or 63.09% and total revenues from SCHOTT were
$95,695 or 20.1% of total revenues.

Competition

     To the best of Management's knowledge, no other company now has a product
or is developing a product intended for the same clinical application as the
BACcel(TM) system. Therefore we are not aware of any actual or impending
competitor. However, the industry in which we compete is subject to rapid
technological changes, and we may face competition for the BACcel(TM) system.

     Publicity frequently appears in the press concerning new products for rapid
bacterial identification using genes or other molecular markers ("molecular
diagnostics"). Numerous acquisitions, licenses, and distribution arrangements
have been announced over the last few years for such products. However, none of
these announced technologies appears applicable to treatment decision support
for active, life-threatening infections. Primary reasons include slow speed
and/or inadequate accuracy. Fundamental biological limitations arise from the
complexity of the majority of drug resistance mechanism expression. This
complexity precludes direct interpretation of gene presence or absence and
extrapolating to prescription guidance. Many new diagnostic technologies also
require prior isolation of cultured colonies in order to assure accuracy. The
time required to obtain such isolates prevents these technologies from serving
as rapid diagnostics for treatment decision support.

                                       7
<PAGE>

     The leading companies with automated microbiological testing include Becton
Dickinson (NYSE: BDX), bioMerieux (France), Dade Behring (acquired by Siemens,
Germany), and Trek Diagnostics (acquired by Magellan Biosciences, private).
These products provide broad-based culturing and analysis of a wide variety of
bacteria. Such products require purified bacterial strains or "isolates" for
analysis, which requires at least overnight culturing to produce enough
organisms to test. These products then require at least one additional growth
cycle as part of the test. These products use standard culturing methods,
including enrichment growth and colony isolation, and therefore cannot achieve
the necessary speed for the applications addressed by the BACcel(TM) system.

     Many potential competitors have greater research and development,
financial, manufacturing, marketing and sales resources than we do. In addition,
some potential competitors may, individually or together with companies
affiliated with them, have greater human and scientific resources than we do.
Potential competitors could develop technologies and methods for materials that
render the BACcel(TM) system and our technologies and methodologies less
competitive. However, neither industry nor academic research sources alerted us
to any development programs that address the same applications as the BACcel(TM)
system.

Operations

     We own all of our laboratory equipment. We lease approximately 6,400 square
feet of laboratory and administrative space. Within our laboratory facility, we
constructed a cleanroom for research and development and pilot production. We
believe the facility has adequate capacity to implement the current product
development plan.

     We have identified second sources for all materials used in OptiChem(R)
formulation.

     BACcel(TM) system development requires certain components that are
custom-fabricated to our specifications. Such components include
injection-molded plastic components, die-cut laminates, and machined mechanical
components. In all applicable cases, we own the production tooling and believe
that we will be able to qualify secondary sources. We plan to maintain inventory
levels sufficient to bridge second-source response times and include an adequate
safety factor to support ongoing development.

     We do not plan significant additional engineering development activity.
Effectively all internal operations are now devoted to assay and antibody
development.

                                       8
<PAGE>

     We have licensed to SCHOTT the right to produce microarraying slides and
therefore do not perform production activities related to microarraying
products.



















                                        9
<PAGE>

Intellectual Property

     We rely upon a combination of patent, copyright, trademark and trade secret
laws; employee and third party non-disclosure agreements, license agreements and
other intellectual property protection methods to protect our proprietary
rights. We are committed to aggressively develop a continuing stream of
intellectual property and to defend our position in key technologies. As of
October 26, 2009, we have 7 patents with 17 additional United States and
international patent filings in progress.

     Accelr8's first patent on the OptiChem(R) technology, U.S. Patent No.
6,844,028 titled "Functional Surface Coating" was issued on January 18, 2005.
The patent specification covers the core OptiChem(R) technology. On June 27,
2006, the United States Patent Office issued Patent No. 7,067,194 which awarded
the Company a patent for devices that use OptiChem(R) coatings.

     Accelr8's first patent on the core BACcel(TM) technology, U.S. Patent No.
7,341,841 titled "Rapid microbial detection and antimicrobial susceptibility
testing" was issued on March 11, 2008. The patent specification covers methods
used to derive identification and antibiotic susceptibility from tests on
individual immobilized bacterial cells.

     There can be no assurance that third parties will not assert infringement
or other claims against us with respect to any existing or future products. We
cannot assure you that licenses would be available if any of our technology was
successfully challenged for infringement by a third party, or if it became
desirable to use any third-party technology to enhance the Company's products.
Litigation to protect our proprietary information or to determine the validity
of any third-party claims could result in a significant expense to us and divert
the efforts of our technical and management personnel, whether or not such
litigation is determined in our favor.

     While we have no knowledge that we are infringing upon the proprietary
rights of any third party, there can be no assurance that such claims will not
be asserted in the future with respect to existing or future products. Any such
assertion by a third party could require us to pay royalties, to participate in
costly litigation and defend licensees in any such suit pursuant to
indemnification agreements, or to refrain from selling an alleged infringing
product or service.

     We have registered trademarks in the United States for: OptiChem(R),
BACcel(TM), and Quantum Microbiology(TM) and three additional trademarks
pending.

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<PAGE>

Employees and Consultants

     We have eight full-time employees and agreements with two consultants. We
have not entered into any collective bargaining agreements.

Item 1A. Risk Factors

     Investing in our securities involves risk. In evaluating the Company,
careful consideration should be given to the following risk factors, in addition
to the other information included or incorporated by reference in this Annual
Report. Each of these risk factors could materially adversely affect our
business, operating results or financial condition, as well as adversely affect
the value of an investment in our common stock. In addition, the
"Forward-Looking Statements" located in this Form 10-K, and the forward-looking
statements included or incorporated by reference herein describe additional
uncertainties associated with our business that should be carefully evaluated
prior to making a decision to invest in our securities.

     Dependence on key employees. Our success depends to a significant extent
upon a number of key management and technical personnel, the loss of one or more
of whom could have a material adverse effect on our results of operations. We
carry key man life insurance in the amount of $5 million on Thomas V. Geimer.
The Board of Directors has adopted resolutions under which one-half of the
proceeds of any such insurance will be dedicated to a beneficiary designated by
the insured. There can be no assurance that the proceeds from such life
insurance would be sufficient to compensate us for the loss of Mr. Geimer, and
these policies do not provide any benefits to the Company if Mr. Geimer becomes
disabled or is otherwise unable to render services to the Company. Further, the
loss of David Howson, President of the Company, may have a material adverse
effect upon the Company and its business. We believe that our continued success
will depend in large part upon our ability to attract and retain highly skilled
technical, managerial, sales and marketing personnel. There can be no assurance
that we will be successful in attracting and retaining the personnel we require
to develop and market our products, develop new products and to conduct our
operations successfully.

     Limited revenues from our products and no assurance of future revenues. We
have received limited revenue from sales based on products using our OptiChem(R)
technology. We have received technical development fees in connection with our
development of the BACcel(TM) system but have conducted no sales. While we have
received limited revenues from sales of our OptiChem(R) products, there is no
assurance that we will be successful in marketing our OptiChem(R) products in
the future or will receive any revenue from such products. Further, there can be
no assurance that we will be successful in marketing the BACcel(TM) system or
will receive any revenues from it. Further, there is no assurance we will
receive any revenues in the future. We have experienced losses from operations
and negative cash flow that is likely to continue unless we are able to
successfully complete the development of the BACcel(TM) system and license it to
a third party for development, manufacturing, and marketing or sell it into the
marketplace. If we are unsuccessful in obtaining revenue from sales of our
OptiChem(R) technology or to license the BACcel(TM) system to a third party for
development, manufacturing, and marketing, we will likely continue to experience
losses from operations and negative cash flow as we have in the past, which may
have a material adverse effect upon the Company, its results of operations and
the price of our Common Stock may be adversely affected.

                                       11
<PAGE>

     Our success depends partly on our ability to successfully introduce and the
market acceptance of our current and new products. In a market primarily driven
by the need for innovative products, our revenue growth will depend on
overcoming various technological challenges to successfully introduce our
current and new products, including but not limited to the BACcel(TM) system or
other technology based upon the intellectual property included in the BACcel(TM)
system into the marketplace in a timely manner. In addition, we must continue to
develop new applications for our existing technologies, including but not
limited to additional commercial applications for the BACcel(TM) system
proprietary technology. Market acceptance of these products will depend on many
factors, including, but not limited to, demonstrating that our technologies
perform as intended and are superior to other technologies and products that are
currently available or may become available in the future.

     If we are unable to successfully develop new products or if the market does
not accept our products, or even if we experience difficulties or delays, we may
be unable to attract additional customers for our products or license our
products to other strategic partners, which would seriously harm our business
and future growth prospects.

     If we are unable to effectively protect our intellectual property, we may
be unable to prevent infringement. Our success depends in part on our ability to
obtain and maintain patent protection for the technology underlying our
products, especially that used in the BACcel(TM) system, both in the United
States and in other countries. We cannot assure you that any of the presently
pending or future patent applications will result in issued patents, or that any
patents issued to us or licensed by us will not be challenged, invalidated or
held unenforceable. Further, we cannot guarantee that any patents issued to us
will provide us with a significant competitive advantage.

     If we fail to successfully enforce our proprietary technology or otherwise
maintain the proprietary nature of our intellectual property with respect to our
significant current and proposed products, our competitive position, our ability
to complete the development of the BACcel(TM) system and future sales or license
of this product or technology could suffer, which would have a material adverse
effect upon the Company and its results of operations.

     Notwithstanding our efforts to protect our intellectual property, our
competitors may independently develop similar or alternative technologies or
products that are equal to or superior to our technology and products without
infringing on any of our intellectual property rights or design around our
proprietary technologies. If customers prefer these alternative technologies as
compared to our technology, it may have a material adverse effect upon the
Company, its results of operations and the price of our Common Stock may be
adversely affected.

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<PAGE>

     Our products could infringe on the intellectual property rights of others.
Due to the significant number of U.S. and foreign patents issued to, and other
intellectual property rights owned by entities operating in the industry in
which we operate, we believe that there is a significant risk of litigation
arising from infringement of these patents and other rights. Third parties may
assert infringement or other intellectual property claims against us or our
licensees. We may have to pay substantial damages, including treble damages, for
past infringement if it is ultimately determined that our products infringe on a
third party's proprietary rights. In addition, even if such claims are without
merit, defending a lawsuit may result in substantial expense to us and divert
the efforts of our technical and management personnel.

     We may also be subject to significant damages or injunctions against
development and sale of some of our products, which could have a material
adverse effect on our future revenues. Furthermore, claims of intellectual
property infringement may require us to enter into royalty or license agreements
with third parties, and we may be unable to obtain royalty or license agreements
on commercially acceptable terms, if at all.

     Third parties may seek to challenge, invalidate or circumvent issued
patents owned by or licensed to us or claim that our products and operations
infringe their patent or other intellectual property rights. In addition to our
patents, we possess an array of unpatented proprietary technology and know-how
and we license intellectual property rights to and from third parties. The
measures that we employ to protect this technology and these rights may not be
adequate. Moreover, in some cases, the licensor can terminate a license or
convert it to a non-exclusive arrangement if we fail to meet specified
performance targets.

     We may incur significant expense in any legal proceedings to protect our
proprietary rights or to defend infringement claims by third parties. In
addition, claims of third parties against us could result in awards of
substantial damages or court orders that could effectively prevent us from
manufacturing, using, importing or selling our products in the United States or
abroad.

     Competition. The industry in which we compete is subject to rapid
technological changes, and we do and may face competition for our products. We
may also face competition from non-medical device companies, including
pharmaceutical companies that may offer alternatives to our products. Many of
our competitors have greater research and development, financial, manufacturing,
marketing and sales resources than we do. In addition, some of our competitors
may, individually or together with companies affiliated with them, have greater
human and scientific resources than we do. Our competitors could develop
technologies and methods that render our technologies and methodologies less
competitive. Accordingly, if competitors introduce products that are more
effective than our current and proposed technologies, including but not limited
to the BACcel(TM) system, it could have a material adverse effect upon the
Company, its results of operations and the price of our Common Stock may be
adversely affected.

                                       13
<PAGE>

     Ability to respond to technological change. Our future success will depend
significantly on our ability to enhance our current products and develop or
acquire and market new products that keep pace with technological developments
and evolving industry standards as well as respond to changes in customer needs.
There can be no assurance that we will be successful in developing or acquiring
product enhancements or new products to address changing technologies and
customer requirements adequately, that we can introduce such products on a
timely basis or that any such products or enhancements will be successful in the
marketplace. Our delay or failure to develop or acquire technological
improvements or to adapt our products to technological change would have a
material adverse effect on our business, results of operations and financial
condition.

     Control by management. At October 26, 2009, our officers and directors
owned or controlled of record approximately 205,913 (not including 52,532 shares
to be issued to Tom Geimer that have not yet been issued) or 2.3% of the
outstanding shares of our Common Stock (excluding shares held in the Rabbi
Trust). If they exercise all of the options that they currently hold, they will
own 878,445 (not including 52,532 shares to be issued to Tom Geimer that have
not yet been issued) or 8.99% of the then outstanding shares of our Common Stock
(excluding shares held in the Rabbi Trust). Due to their stock ownership, the
officers and directors may be in a position to elect the Board of Directors and
to control the business and affairs of the Company, including certain
significant corporate actions such as acquisitions, the sale or purchase of
assets and the issuance and sale of the Company's securities.

     Shares eligible for future sale. As of July 31, 2009, we had reserved
1,500,000 shares of Common Stock for issuance upon exercise of options which
have been or may be granted pursuant to our stock option plans. As of July 31,
2009, 794,000 options had been granted pursuant to the Qualified Plan with
17,500 of these options exercised, 231,500 options that expired, leaving 137,500
available for grant and 350,000 options had been granted pursuant to the
Non-Qualified Plan with 125,000 of these options exercised, 5,000 options that
expired, 50,000 that were cancelled and 55,000 available for grant. As of July
31, 2009, 620,000 options had been granted pursuant to the Omnibus Plan with
5,000 of these options exercised, 130,000 expired leaving 10,000 available for
grant.

     As of October 26 2009, to our knowledge there were approximately 225,000
outstanding shares of our Common Stock, not held by our officers, directors or
in the Rabbi Trust that are restricted securities whose restrictions have lapsed
and may be sold as unrestricted securities. Although the Securities Act and Rule
144 place certain prohibitions on the sale of restricted securities, restricted
securities may be sold into the public market under certain conditions.

                                       14
<PAGE>

     The 1,129,110 warrants exercised by Mr. Geimer were exercised at $0.24 per
share on October 14, 1997 and contributed to a Rabbi Trust. Under the terms of
the Rabbi Trust, we will hold the shares in the trust, and carry them as
treasury stock. The Rabbi Trust provides that upon Mr. Geimer's death,
disability or termination of his employment, the shares will be released ratably
over the subsequent ten (10) years, unless the Board of Directors determines
otherwise. See Note 7 to the Financial Statements for further information. Sales
of Common Stock underlying Plan Options may adversely affect the price of the
Common Stock.

     We need a new strategic partner to assist in developing, manufacture and
taking the BACcel(TM) system to market. In May 2008 we began a technical
development project with funding from BD. As part of the project agreement, BD
also obtained an option to purchase a royalty-bearing global exclusive license
for commercial product development, manufacturing, and marketing of the
BACcel(TM) system and its technology for application in human infectious
diseases. BD declined to exercise its option on September 24, 2009 and as
result, we will not receive any further technical development fees from BD. We
are currently seeking an alternative strategic partner to develop, manufacture
and market the BACcel(TM) system, of which there can be no assurance we will be
successful in finding such a strategic partner. If we are unable to locate a new
strategic partner, we may be unable to complete the development of, to
manufacture and to bring the BACcel(TM) system to market. Failure to obtain a
strategic partner could have a material adverse effect upon the Company, its
results of operations and an investment in our Common Stock.

     We have recently lost our largest source of revenues and the loss of SCHOTT
could further reduce our revenue. During the fiscal year ended July 31, 2009,
total revenues from BD were $1,200,00 or 94.49% of total revenues and revenues
from SCHOTT were $67,212 or 5.29% of total revenues. During the fiscal year
ended July 31, 2008, total revenues from BD were $300,000 or 63.09% and total
revenues from SCHOTT were $95,695 or 20.1% of revenues. On September 24, 2009,
BD declined to exercise its licensing option and will no longer participate in
the technical development of the BACcel system. Accordingly, we will not receive
revenues from BD in the future. We expect we will be reliant on SCHOTT for
revenue for the foreseeable future. There can be no assurance that revenue from
SCHOTT or any customer will continue at their historical levels. The loss of
SCHOTT as a client or reduced license revenue from SCHOTT could have a material
adverse effect on business, financial condition and results of operations.

     We use hazardous materials in some of our research, development and
manufacturing processes. Our research activities sometimes involve the
controlled use of various hazardous materials. Although we believe that our
safety procedures for handling and disposing of such materials comply with the
standards prescribed by state and federal regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. We
could be held liable for any damages that might result from any accident
involving such materials. Any such liability could have a material adverse
effect on our business, financial condition and results of operations.

                                       15
<PAGE>

     Changes in governmental regulations may reduce demand for our products or
increase our expenses. We compete in markets in which we or our customers must
comply with federal, state, local and foreign regulations, such as
environmental, health and safety and food and drug regulations. We develop,
configure and market our products to meet customer needs created by these
regulations. Any significant change in these regulations could reduce demand for
our products.

     We have a single research and development facility and we may lose revenue
and be unable to continue to conduct our research and development and product
development activities if we lose this facility. We conduct all of our research
and development and product development activities in our existing facility in
Denver, Colorado. If for whatever reason we were unable to use this facility to
conduct our research and development and product development activities, we
would have no other means of conducting such activities until we were able to
restore such capabilities at our facility or develop an alternative facility.
Further, in such an event, we may lose revenue and significant time during which
we might otherwise have conducted research and development and product
development activities. Further, we may not be able to maintain our
relationships with our licensees, customers or any future strategic development
partners. While we carry a nominal amount of business interruption insurance to
cover lost revenue and profits, this insurance does not cover all possible
situations. In addition, our business interruption insurance would not
compensate us for the loss of opportunity and potential adverse impact on
relations with our licensees, customers or any future strategic development
partners. The loss of facility may have a material adverse effect upon the
Company and its results of operations.

     Our results of operations will be adversely affected if we fail to realize
the full value of intellectual property. As of July 31, 2009, our total assets
of $5,231,435 included $3,169,724 of Intellectual Property. These assets have
historically been amortized on a straight-line basis over their estimated useful
lives. Intangible assets to be held and used by the Company are reviewed for
impairment whenever events or circumstances indicate that the carrying amount of
the asset may not be recoverable. We continuously evaluate the recoverability of
these items based on estimated future cash flows from and estimated fair value
of such assets, and provide for impairment if such undiscounted cash flows are
insufficient to recover the carrying amount of the asset. Future impairment
testing may result in additional intangible asset write-offs, which could
adversely affect our financial condition and results of operations.

     Our business strategy approach may be adversely affected by potential
healthcare reform. Our vision is to develop and commercialize the BACcel(TM)
system, an innovative, integrated system for rapid identification of bacterial
and its antibiotic resistance in critically ill patients. Healthcare reform and
the growth of managed care organizations have been considerable forces in the
medical diagnostics industry and in recent political discussions. These forces
continue to and are expected in the future to place constraints on the levels of
overall pricing and thus could have a material adverse effect on our future
profit margins of our products or the amounts that we are able to receive from
third parties for the licensing of such products. Such continuing changes in the
United States healthcare market could also force us to alter our approach to
selling, marketing, distributing and servicing our customer base. In and outside
the United States, changes to government reimbursement policies could reduce the
funding that healthcare service providers have available for diagnostic product
expenditures, which could have a material adverse impact on the use of the
products we are developing and our future sales, license and royalty fees and/or
profit margin.

                                       16
<PAGE>

     We make significant investments in research and development, but there is
no guarantee that any of these investments will ultimately result in a
commercial product that will generate revenues. The BACcel(TM) system integrates
several of our component products, systems and processes. For the year ended
July 31, 2009, we spent $745,927 and during the fiscal year ended July 31, 2008
we spent $880,984 on research and development expenses. Notwithstanding these
investments, we anticipate that we will have to spend additional funds in the
research and development of the BACcel(TM) System. There can be no assurance
that the BACcel(TM) system will be successful, or even if it is successful will
be accepted in the marketplace. Further, we might also encounter substantial
delays in getting products to market in a timely fashion. There can be no
assurance that we will complete the development of the BACcel System, will bring
it to market or will generate revenues from licensing or sales.

     Our future success is dependent in large part upon the successful
development of the BACcel(TM) system. Our future success and profitability is
dependent in large part on our successful development of the BACcel(TM) system.
We have spent a significant amount of resources developing the BACcel(TM) system
and there can be no assurance that we will successfully develop the BACcel(TM)
system. If we are not successful in the development of the BACcel(TM) system, it
would have a material adverse effect upon the Company's revenues and results of
operations, it could lead to impairment of certain of our intellectual property
and would likely have a material adverse effect upon the price of the our Common
Stock.

     Changes in our business strategy or plans may adversely affect our
operating results and financial condition. If our business strategy or plans
change, whether in response to changes in economic conditions or developments in
the diagnostics industry, or otherwise, we may be required to expend
significantly more resources than planned to develop the BACcel(TM) system or
other new products. The expense of such change could adversely affect our
operating results and financial condition.

     Compliance costs with recently enacted changes in the securities laws and
regulations pursuant to the Sarbanes-Oxley Act of 2002 will increase our costs.
The Sarbanes-Oxley Act of 2002 that became law in July 2002 has required changes
in some of our corporate governance, securities disclosure, accounting and
compliance practices. In response to the requirements of that act, the
Securities and Exchange Commission and the NYSE Amex Equities have promulgated
rules on a variety of subjects. Compliance with these rules as well as the
Sarbanes-Oxley Act of 2002 has increased our legal, financial and accounting
costs, and we expect the cost of compliance with these new rules to continue to
increase and to be permanent. Further, the new rules may increase the expenses
associated with our director and officer liability insurance.

                                       17
<PAGE>

     Section 404 of the Sarbanes Oxley Act of 2002 Compliance. We became subject
to Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404") during the
fiscal year ended July 31, 2009, which requires us to include management's
assessment of the effectiveness of our internal controls over financial
reporting in our Annual Report on Form 10-K. A material weakness is defined as a
significant deficiency or combination of significant deficiencies, that results
in a reasonable possibility that a material misstatement of our financial
statements will not be prevented by our internal control over financial
reporting. A significant deficiency means a control deficiency, or combination
of control deficiencies, that adversely affects our ability to initiate, record,
process or report financial data reliably in accordance with generally accepted
accounting principles such that there is more than a remote likelihood that a
misstatement of our financial statements that is more than inconsequential will
not be prevented or detected by our internal control over financial reporting.

     In the event that we find material weaknesses in the future and do not
adequately remedy these material weaknesses, and if we fail to maintain proper
and effective internal controls in future periods, we could become subject to
potential review by the NYSE Amex Equities, the Securities and Exchange
Commission or other regulatory authorities, which could require additional
financial and management resources, could result in our delisting from the NYSE
Amex Equities and could compromise our ability to run our business effectively,
could cause investors to lose confidence in our financial reporting and could
have a material adverse effect upon the Company and could result in a reduction
in the price of our Common Stock.

     We maintain cash balances in our bank account that exceed the FDIC
insurance limitation. We maintain our cash assets at a commercial bank in an
amount in excess of the Federal Deposit Insurance Corporation insurance limit of
$250,000. At July 31, 2009 and 2008, the Company's uninsured cash balance was
approximately $650,275 and $983,100, however, this amount is invested under a
repurchase agreement with the bank and is collateralized by securities of the
United States Federal agencies with approximate market values of 102% of the
investment. However, due to the economic downturn and the failures of several
financial institutions, there is a risk that in the event of a failure at the
commercial bank where we maintain our deposits, we may incur a loss of the
amount of our cash balance that exceeds the insurance limitation, which would
have a material adverse effect upon us and our results of operations.

     Our stock price has been volatile and may continue to be volatile; Dividend
Policy. The trading price of our common stock has been, and is likely to
continue to be, highly volatile, in large part attributable to developments and
circumstances related to factors identified in "Forward-looking Statements" and
"Risk Factors." The market value of your investment in our common stock may rise
or fall sharply at any time because of this volatility, and also because of
significant short positions taken by investors from time to time in our stock.
During the fiscal year ended July 31, 2009, the closing sale price for our
common stock ranged from $1.25 to $4.50 per share. The market prices for
securities of medical technology companies historically have been highly
volatile, and the market has experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. We do not intend to pay any cash dividends on our Common Stock in the
foreseeable future.

                                       18
<PAGE>

     Colorado law and our Articles of Incorporation may protect our directors
from certain types of lawsuits. Colorado law provides that our directors will
not be liable to us or our stockholders for monetary damages for all but certain
types of conduct as directors. Our Articles of Incorporation permit us to
indemnify our directors and officers against all damages incurred in connection
with our business to the fullest extent provided or allowed by law. The
exculpation provisions may have the effect of preventing stockholders from
recovering damages against our directors caused by their negligence, poor
judgment or other circumstances. The indemnification provisions may require us
to use our limited assets to defend our directors and officers against claims,
including claims arising out of their negligence, poor judgment, or other
circumstances.

     We will require additional capital in the future and we cannot assure you
that capital will be available on reasonable terms, if at all, or on terms that
would not cause substantial dilution to your stock holdings. We have
historically relied upon our existing cash balance, revenues and capital from
the sale of our securities to fund our operating losses and we expect that we
will continue to incur operating losses until we are able to complete the
development of the BACcel(TM) system and sell it into the marketplace or license
it to a third party for its development, manufacturing and marketing. If capital
requirements vary materially from those currently planned, we may require
additional capital sooner than expected. There can be no assurance that such
capital will be available in sufficient amounts or on terms acceptable to us, if
at all. Further, any sale of a substantial number of additional shares will
cause dilution to an investment in our Common Stock and could also cause the
market price of our Common Stock to decline.

     We have the authority to issue up to 14,000,000 shares of Common Stock (of
which, as of October 26, 2009, 10,226,210 shares were outstanding) and to issue
options and warrants to purchase shares of our Common Stock (of which 1,165,000
options and 100,000 warrants to acquire shares of our common stock were issued
and outstanding). Issuances of additional shares of our stock in the future
could dilute existing shareholders and may adversely affect the market price of
our Common Stock.

     The Company's Independent Auditors have included a Going Concern paragraph
in their opinion for our July 31, 2009 financial statements. The independent
auditor's report accompanying the Company's audited July 31, 2009 consolidated
financial statements contain an explanatory paragraph expressing substantial
doubt about the Company's ability to continue as a going concern. The audited
July 31, 2009 consolidated financial statements have been prepared "assuming
that the Company will continue as a going concern," which contemplates that the
Company will realize its assets and satisfy its liabilities and commitments in
the ordinary course of business. There can be no assurance that the Company will
be able to generate sufficient positive cash flow from operations to address all
of its cash flow needs, and to continue as a going concern. If the Company does
not continue as a going concern, it will have to cease operations and you would
likely lose all of your investment in the Company.

                                       19
<PAGE>

     We Have Received Notice From NYSE Amex Equities For Having Stockholder
Equity of less than $6 million and losses from continued operations and net
losses in its five most recent fiscal years. On January 6, 2009, the Company was
notified by the staff of the NYSE Amex Equities (the "Exchange"), formerly known
as the NYSE Alternext US LLC and the American Stock Exchange, Inc., that the
staff has determined, following a review of publicly available information, that
the Company is not in compliance with Section 1003(a)(iii) of the NYSE Alternext
Company Guide (the "Company Guide") in that it has stockholder equity of less
than $6 million and losses from continued operations and net losses in its five
most recent fiscal years. In order to maintain its listing, the Company
submitted a plan on February 6, 2009 (the "Plan") advising the Exchange of
action it has taken or will take, that would bring it into compliance with the
continued listing standards. On March 18, 2009 the Company received a notice
from the Exchange indicating that the Exchange Staff granted a listing extension
on the basis of the plan submitted by the Company to regain compliance with
listing standards by July 6, 2010. The Company is subject to periodic review by
the Exchange to determine whether it is making progress consistent with the
Plan. If the Company does not maintain compliance with the Plan, if the Plan is
reviewed by the Exchange and it determined the Company is not making progress
pursuant to the Plan or if the Company does meet the stockholder equity of more
than $6 million by July 6, 2010, it will likely receive notice of delisting from
the Exchange, which notice may be appealed at that time. There can be no
assurance the Company will be able to maintain its listing on the Exchange,
which may have a material adverse effect upon the Company and the price of its
shares of Common Stock.

     Glossary

     Antibody: a specialized protein (immunoglobulin) produced by the immune
response that binds to a particular molecular surface that has previously been
presented to certain cells in the organism's blood. The end-product of the
"humoral" component of the immune response. Key component of immunoassays
detecting as the analyte-specific detection agent.

     Antigen: the material used to stimulate immune antibody production in an
organism.

     Assay, Qualitative: a chemical test in which the result is expressed as the
presence or absence of an analyte. Also referred to as "detection," as opposed
to measuring the amount of material.

                                       20
<PAGE>

     Assay, Quantitative: a test in which the result is expressed as the
quantity of analyte in a sample. Quantitative assays may be used to determine
whether the amount of analyte is above or below a "cut-point" that distinguishes
an acceptable level of the analyte, such as a food pathogen, from an
unacceptable level.

     Culturing (Bacterial): the analytical process of growing bacteria from a
patient specimen (blood, sputum, etc.) to a quantity suitable for isolation and
analysis.

     DNA: the nucleic acid biomolecules that carry an organism's genetic code.
The famous "double helix" molecular model of Watson and Crick.

     Gene: a sequence of DNA or RNA that produces a functional protein product
when translated by the normal biosynthetic route.

     Genomics: the study, including sequencing, of molecules that carry an
organism's genetic code (nucleic acids, DNA and RNA).

     Genotype: the DNA gene sequence makeup that distinguishes one type of
organism from another. Genotype differences may or may not directly correlate
with phenotypes (see definition below).

     Immunoassay: any type of biochemical assay that uses antigen-antibody
affinity as the assay basis of selection and detection.

     Isolation (Bacterial): the technique of growing bacterial cultures on
selective media in such a way that only particular species grow successfully,
thereby isolating colonies of the species for further analysis.

     Microarray: a regular geometric array (matrix or grid pattern) of
individual reactive chemical probes affixed to a physical substrate such as a
microscope slide. Used in assays to conduct thousands of analyses at one time on
sample materials presented to the microarray. The high-density evolution of the
microtiter plate.

     Microtiter Plate: a multi-well plate (typically 96 wells) of standard
dimensions in which individual reactions occur near-simultaneously with
different reagents. Analyzed visually or by automated optical plate readers.
Currently the most widely-used standard laboratory assay format.

     Nucleic Acid: DNA (deoxyribo-nucleic acid) or RNA (ribo-nucleic acid).
Polymeric chains of nucleotides whose particular sequence constitutes an
organism's genetic code (DNA and genomic RNA) or that participate in the
biosynthesis of new protein molecules (other types of RNA such as messenger RNA,
transfer RNA, and ribosomal RNA).

     Pathogen: an infectious organism (bacteria, viruses, molds and fungi,
prions) that when invading a host causes a disease. Pathogens may be transmitted
through food, water, air, and/or contact with infected individuals or their
biological fluids.

                                       21
<PAGE>

     Phenotype: for microorganisms, the functional responses or observable
characteristics that differentiate one set of organisms from another within the
same species. The basis for strain differentiation based on observable behavior
or properties other than those expressed in the genotype.

     Protein: biological polymeric macromolecules formed by long chains of amino
acids (twenty in humans) and which provide the mechanism for cellular physiology
and metabolism. All life functions are carried out through the mediation of
proteins (typically enzymes).

     Sensitivity: the smallest quantity of analyte that the assay can detect.
Same as "Limit Of Detection." Statistically, the proportion of false negatives
reported for a population sample.

     Strain (Bacterial): variants or phenotypes of a bacterial species that
exhibit significant characteristics that allow discrimination of one strain from
another. In clinical application usually distinguished on the basis of disease
severity, toxic products, antibiotic resistance, and other medically relevant
properties.

     Surface Chemistry: the chemistry of materials that provide a barrier or
contact surface. In the context of biochemical assays, the chemistry of all
exposed surface area that may come into contact with assay reagents.

     Ventilator Associated Pneumonia (VAP): a version of hospital-acquired
pneumonia whose symptoms first appear at least 48 hours after starting
mechanical ventilation.

Item 1B. Unresolved Staff Comments.

     Not Applicable.

Item 2. Property

     We lease approximately 6,400 square feet of office and laboratory space at
7000 North Broadway, Building 3-307, Denver, Colorado 80221. The monthly rent
and utilities average approximately $6,000 per month. The lease expires on
September 30, 2010. Management believes this facility is suitable and adequate
for its current operations.

Item 3. Legal Proceedings

     None.

Item 4. Submission of Matters to a Vote of Security Holders

     No matters were submitted by the Company to a vote of our security holders
through the solicitation of proxies or otherwise, during the fourth quarter of
the fiscal year covered by this Annual Report.

                                       22
<PAGE>

                                     PART II

Item 5. Market For Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities

     On October 9, 2003, the Company's common stock began trading on the
American Stock Exchange under the trading symbol AXK. On October 1, 2008, NYSE
Euronext completed acquisition of the American Stock Exchange and was integrated
with Alternext European small-cap exchange and renamed NYSE Alternext U.S. In
March 2009, NYSE Alternext U.S. was rebranded as NYSE Amex Equities.

     The table set forth below presents the range, of the high and the low sales
price per share of Common Stock for the past two years on a quarterly basis as
quoted by the NASDAQ.

                  Quarter Ended            High        Low
                  ------------------------------------------

                  Fiscal 2009
                  -----------
                  October 31, 2008         $4.50      $2.05
                  January 31, 2009         $3.90      $1.83
                  April 30, 2009           $2.43      $1.25
                  July 31, 2009            $3.62      $1.53

                  Fiscal 2008
                  -----------
                  October 31, 2007         $3.80      $1.90
                  January 31, 2008         $4.97      $3.30
                  April 30, 2008           $4.50      $3.81
                  July 31, 2008            $5.11      $3.70

     The closing price for our Common Stock on October 26, 2009 was $1.26. On
October 26, 2009, the Company had approximately 263 shareholders of record,
which does not include shareholders whose shares are held in street or nominee
names. The Company believes that there are approximately 1,600 beneficial owners
of its Common Stock.

     Holders of Common Stock are entitled to receive dividends as may be
declared by the Board of Directors out of funds legally available therefore. To
date, no dividends have been declared by the Board of Directors, nor does the
Board of Directors anticipate declaring and paying cash dividends in the
foreseeable future.

Item 6. Selected Financial Data.

     The following selected financial data should be read in conjunction with
the financial statements and related notes thereto appearing elsewhere in this
Form 10-K. The selected financial data as of July 31, 2009 and 2008 and for each
of the two years in the period ended July 31, 2009 have been derived from our
financial statements which have been audited by our independent auditors and
included elsewhere in this Form 10-K. The selected financial data provided below
is not necessarily indicative of our future results of operations or financial
performance.

                                       23
<PAGE>

                                                      Year Ended July 31
Statement of Operations Data:                         2009         2008
                                                      ----         ----
                                   (In thousands, except per share data)

Total Revenue                                       $1,270         $475
                                         -------------------------------
Loss from operations                                 $(679)     $(1,730)
                                         -------------------------------
Weighted average shares outstanding             10,226,210   10,059,717
Basic and diluted net loss per share                $(0.07)      $(0.17)

Balance Sheet Data:                                   2009         2008
                                                      ----         ----
(In thousands)
Working capital                                       $785       $1,104
Current assets                                         943        1,376
Current liabilities                                    158          272
Total assets                                         5,231        5,827
Total liabilities                                    1,337        1,414
Shareholders' equity                                $3,894       $4,413

Item 7. Management's Discussion and Analysis and Results of Operation

Overview

     On January 18, 2001, Accelr8 purchased the OpTest portfolio of technology
assets and commenced investment in development and optimization of OpTest's
surface chemistry (OptiChem(R)) and quantitative instrument (QuanDx). Our
proprietary surface chemistry and its quantitative instruments support rapid
assessment of medical diagnostics, food-borne pathogens, water-borne pathogens
and bio-warfare agents. The Company sells advanced microarray slides coated with
its proprietary OptiChem(R) activated surface chemistry for use in academic
research, drug discovery and molecular diagnostics. This surface coating has the
ability to shed sticky biomolecules that interfere with bio-analytical assays
such as microarrays and immunoassays. This property substantially improves
analytical performance by enabling higher sensitivity, greater reproducibility,
and higher throughput by virtue of simplified application methods.

     On November 24, 2004 the Company entered into an exclusive two year
manufacturing and marketing agreement (the "License Agreement") with SCHOTT
Jenaer Glas (GMBH) of Jena Germany for OptiChem(R) coated amine-reactive slides
(Slide H). Pursuant to the License Agreement, SCHOTT paid the Company a
non-refundable fee of $100,000, of which $50,000 was credited against future
royalties. An additional $15,000 in deferred revenue was recorded for training
supplied to SCHOTT. During the 2-year term of the License Agreement, SCHOTT
agreed to pay the Company a royalty payment equal to 6% of net sales of products
licensed under the License Agreement. An optional 1-year non-exclusive license
extension to market and manufacture Slide H was exercised by SCHOTT on September
27, 2006.

                                       24
<PAGE>

     On December 21, 2006, the Company and SCHOTT entered into an agreement for
the manufacturing and worldwide sales of Slide HS coatings on microarraying
slides (the "Slide HS Agreement"). The Slide HS Agreement granted SCHOTT the
right to manufacture and market Streptavidin coated microarray slides for 2
years through December 31, 2009. In connection with the Slide HS Agreement,
SCHOTT paid the Company a $50,000 license fee and $50,000 prepaid royalty
payment.

     On November 24, 2007, the Company and SCHOTT extended the non-exclusive
Slide H license for three more years, to expire on November 23, 2010 for an
aggregate payment of $100,000. Of this, $50,000 was for a prepaid license and
$50,000 for prepaid royalties. In December 2008 the Company agreed to extend
SCHOTT's non-exclusive Slide H for one additional year, ending November 24, 2011
and continuing the same terms. SCHOTT paid the Company $50,000 in prepaid
royalties.


     During the fiscal year ended July 31, 2009, deferred revenues of $67,212 in
prepaid royalties by SCHOTT were recognized.

     The Company entered into an exclusive seven-year license with NanoString
Technologies Inc. on October 5, 2008. The license grants to NanoString the right
to apply OptiChem(R) coatings to NanoString's proprietary molecular detection
products. Pursuant to the license agreement, NanoString paid the Company a
non-refundable fee of $100,000 of which $50,000 was credited against future
royalties. Under the royalty-bearing license, NanoString is to pay the Company a
royalty at the rate of eight percent (8%) of net sales for sales up to $500,000
of NanoString licensed products. The royalty rate on the second $500,000 of net
sales is six percent (6%), and the royalty thereafter is four percent (4%).
During the fiscal year 2009, deferred revenues recorded were $2,673.

     On May 22, 2008, the Company and Becton, Dickinson and Company ("BD")
entered into a Research and Option Agreement (the "Agreement").

     The Agreement provided for the establishment of a research program from the
date of the Agreement until September 30, 2009 whereby BD funded certain
research work by the Company relating to the Company's BACcel(TM) rapid
diagnostics platform (the BACcel(TM) Platform"). The research program included
mutually agreed upon milestones to support BD's product development planning.
Under the terms of the Agreement, in connection with the research program, the
Company received certain periodic payments from BD between the date of the
Agreement and July 1, 2009.

     The Agreement also granted BD an option to acquire for an upfront payment
and product-delivered royalties an exclusive license (the "Exclusive License")
from the Company for certain know-how and patent rights relating the BACcel(TM)
Platform. Upon termination of the option and the technical development project
subsequent to successful milestone completion, Accelr8 received a non-exclusive
license from BD for certain intellectual property.

                                       25
<PAGE>

     Pursuant to the Agreement, from the effective date of the Agreement until
BD declined to exercise its licensing option on September 24, 2009, the Company
agreed not to engage in or participate in any discussions or negotiations with
parties other than BD for the joint development of, licensing of or intellectual
property relating to the BACcel(TM) Platform for application to human infectious
diseases.

     The Company is currently in discussions with alternative commercialization
prospects and is seeking a new strategic partner to assist in developing,
manufacture and taking the BACcel(TM) system to market.

     Subject to the receipt of capital, during the fiscal year ending July 31,
2010 we intend to continue technical validation of the BACcel(TM) system
methods, continue field studies including pilot clinical studies at Denver
Health and Barnes-Jewish Hospital, continue to publish the results of internal
and collaborative studies, and seek a strategic partner or licensee for
BACcel(TM) product commercialization.

Changes in Results of Operations: Year ended July 31, 2009 compared to year
ended July 31, 2008

     Technological development fees were $1,200,000 for the year ended July 31,
2009 as compared to $200,000 for the year ended July 31, 2008, a increase of
$1,000,000 or 500%. The technological development fees are the result of the
Development Agreement with BD that terminated on September 30, 2009.

     OptiChem(R) slide revenues for the year ended July 31, 2009 were $69,886 as
compared to $75,520 for the year ended July 31, 2008, resulting in a decrease of
$5,634, or 7.46%. The decrease in OptiChem(R) revenues was primarily due to a
decrease in custom slide services to customers other than SCHOTT or NanoString.
Sales of SCHOTT's Slide H increased 53% from 2008 to 2009.

     License fees for the year ended July 31, 2009 were $0 as compared to
$100,000 during the fiscal year ended July 31, 2008. The decrease in license
fees was primarily the result of the changes in the licencing agreement for
slide H to SCHOTT. Option fees for the year ended July 31, 2009 were $0 as
compared to $100,000 during the fiscal year ended July 31, 2008. The option fee
was the result of an option by BD to enter into the technical development
agreement in March 2008.

     Cost of sales for the year ended July 31, 2009 were $0 compared to $9,649
during the year ended July 31, 2008. This decrease was due to a decrease in
sales of custom slides. The cost of sales as a percentage of OptiChem(R)
revenues was 0% for the year ended July 31, 2009 as compared to 12.8% for the
year ended July 31, 2008.

     Research and development expenses for the year ended July 31, 2009, were
$745,927 as compared to $880,984 during the year ended July 31, 2008, a decrease
of $135,057 or 15.33%. This decrease was primarily the result of reductions in
salaries to research and development staff from $336,390 to $279,501 during the
year ended July 31, 2009, a decrease of $56,889 or 16.91%, an increase in
expenditures to support outside clinical research laboratories to $78,257 for
the year ended July 31, 2009 from $19,427 for the year ended July 31, 2008, an
increase of $58,830 or 302.83%. The increase in outside laboratory expenditures
was primarily the result of increased expenses related to the testing of the
BACcel(TM) system by outside research institutions.

                                       26
<PAGE>

     General and administrative expenses for the year ended July 31, 2009 were
$919,706 as compared to $1,001,284 during the year ended July 31, 2008, a
decrease of $81,578 or 8.15%. The following summarizes the major components of
the changes:

                                                                      Increase
                                                  2009         2008  (Decrease)
                                            -----------------------------------
     Audit and Accounting                      $49,452      $53,983    $(4,531)

     Consulting Fees                           209,577      284,499    (74,922)

     Corporate and Shareholder                  81,701       80,381       1,320

     Corporate Insurance                        32,268       15,435      16,833

     Deferred Compensation                      36,509       39,777     (3,268)

     Employee Benefits                          81,596       74,432       7,164

     Payroll Taxes                              39,324       57,404    (18,080)

     Salaries                                  318,231      314,694       3,537

     Travel                                      2,456        1,778         678

     Legal                                      18,000       25,782     (7,782)

     Other General Administrative Expenses      50,592       53,119     (2,527)
                                            -----------------------------------
                                              $919,706   $1,001,284   $(81,578)

     The decrease in consulting fees of $74,922 was primarily due to a decrease
in expenses incurred as a result of the issuance of stock options.

     The increase in amortization of $4,301 for the year ended July 31, 2009 was
negligible.

                                       27
<PAGE>

     Depreciation for the year ended July 31, 2009 was $22,743 as compared to
$51,182 during the year ended July 31, 2008 a decrease of $28,439 or 55.56%. The
decreased depreciation was primarily due to equipment becoming fully
depreciated.

     Marketing and sales expenses were $13,284 for the year ended July 31, 2009
as compared to $17,005 during the year ended July 31, 2008, a decrease of $3,721
or 21.88%. The decrease was primarily the result of reduced travel and trade
show expenses.

     As a result of these factors, loss from operations for the year ended July
31, 2009 was $679,119 as compared to a loss of $1,727,628 for the year ended
July 31, 2008, a decreased loss of $1,048,509 or 60.1%.

     Interest and dividend income for the year ended July 31, 2009 was $18,328
as compared to $63,075 for the year ended July 31, 2008, a decrease of $44,747
or 70.9%. The decrease was due to lower interest rates earned on our cash
balances and lower cash balances in our accounts.

     Unrealized loss on marketable securities held in the deferred compensation
trust for the year ended July 31, 2009 was $53,406 as compared to an unrealized
loss of $69,590 during the year ended July 31, 2008. The decreased unrealized
loss was a result of market fluctuations on the securities that are held in the
deferred compensation trust.

     Miscellaneous Other Income was $0 for the year ended July 31, 2009 as
compared to $53,801 for the year ended July 31, 2008. The decrease in
Miscellaneous Other Income during the fiscal year ended July 31, 2008 was due to
sales of equipment that were no longer germane to the Company's operations.

     As a result of these factors, net loss for the year ended July 31, 2009 was
$714,197 as compared to $1,680,342 during the year ended July 31, 2008, a
decreased loss of $966,145 or 57.5%.

Capital Resources and Liquidity

     The independent auditor's report accompanying the Company's audited July
31, 2009 consolidated financial statements contain an explanatory paragraph
expressing substantial doubt about the Company's ability to continue as a going
concern. The audited July 31, 2009 consolidated financial statements have been
prepared "assuming that the Company will continue as a going concern," which
contemplates that the Company will realize its assets and satisfy its
liabilities and commitments in the ordinary course of business. Our audited
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should we be unable to
continue as a going concern.

                                       28
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>

     The continued operation of our business will require a capital infusion and
we will need to seek additional capital, likely through debt or equity
financings, to continue operations. We can give no assurance that we will be
able to raise such capital on such terms and conditions we deem reasonable, if
at all. We have limited financial resources until such time that we are able to
generate such additional financing or additional cash flow from operations. Our
ability to achieve profitability and positive cash flow is dependent upon our
ability to find a strategic partner to assist in the development, marketing and
bring the BACCel System to market, to generate revenue from our business
operations and control our costs. Should we be unable to raise adequate capital
or to meet the other above objectives, it is likely that we would have to
substantially curtail our business activity or cease operating.

     During the fiscal year ended July 31, 2009, we did not generate positive
cash flows from operating activities. The primary sources of capital have been
from revenues from operations and our existing cash balances, a portion of which
came from the sale of shares of our common stock in March 2008 totaling
$925,800. On September 24, 2009, BD declined to exercise its licensing option
and will no longer participate in the technical development of the BACcel(TM)
system. Accordingly, we will not receive revenues from BD in the future.

     As of July 31, 2009, the Company had $862,076 in cash and cash equivalents,
a decrease of $371,024 from $1,233,100 at July 31, 2008. The primary reasons for
change in cash and cash equivalents were cash used for operating activities of
$225,656 plus $145,368 net cash used in investing and financing activities.

     For the year ended July 31, 2009, we spent $745,927 on research and
development expenses. As of the date of this annual report, we have only
realized nominal revenues from the sale of our products. Notwithstanding our
investments in research and development, there can be no assurance that the
BACcel(TM) system or any of our other products will be successful, or even if
they are successful, will provide sufficient revenues to continue our current
operations. As of July 31, 2009, management believes that current cash balances
will be sufficient to fund our capital and liquidity needs for the next six
months.

     The following summarizes the Company's capital resources at July 31, 2009
compared with July 31, 2008:

Increase (Decrease)
                                  July 31, 2009     July 31, 2008    Amount of change         %
                                  -------------     -------------    ----------------      -------
Cash and cash equivalents              $862,076        $1,233,100        ($371,024)        -30.09%

Current assets                         $943,219        $1,376,040        ($432,821)        -31.45%

Total assets                         $5,231,435        $5,827,466        ($596,031)        -10.23%

Current liabilities                    $158,105          $272,168        ($114,063)        -41.91%

Working capital                        $785,114        $1,103,872        ($318,756)        -28.88%

Net cash (used in) operating
activities                            ($225,656)        ($963,728)        $738,072         -76.59%

Net cash (used in) provided by
investing activities                  ($145,368)        ($122,641)        ($22,727)         18.53%

Net cash (used) provided by
Financing activities                         $0          $925,800        ($925,800)       -100.00%


                                       29
</TABLE>
<PAGE>

     Our primary use of capital has been for the research and development of the
BACcel(TM) system. We have no lines of credit or other bank or off balance sheet
financing arrangements. We believe our capital requirements will continue to be
met with our existing cash balance, technological development fees and revenues
provided by potential licensors of our products, additional issuance of equity
or debt securities and/or a capital infusion from potential partners in the
development of the BACcel(TM) system. Further, if capital requirements vary
materially from those currently planned, we may require additional capital
sooner than expected. There can be no assurance that such capital will be
available in sufficient amounts or on terms acceptable to us, if at all.
Additional issuances of equity or convertible debt securities will result in
dilution to our current Common Stockholders.

Recent Accounting Pronouncements

     In February 2007, the FASB issued FASB Statement No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities-Including an Amendment of
FASB Statement No. 115" (SFAS No. 159). This standard permits an entity to
choose to measure many financial instruments and certain other items at fair
value. The fair value option permits a company to choose to measure eligible
items at fair value at specified election dates. A company will report
unrealized gains and losses on items for which the fair value option has been
elected in earnings after adoption. SFAS No. 159 was effective for us on August
1, 2008. We did not elect to measure any eligible items at fair value.
Therefore, the adoption of SFAS No. 159 had no impact on the consolidated
financial statements.

     In April 2008, the FASB issued FASB Staff Position FAS 142-3,
"Determination of the Useful Life of Intangible Assets" (FSP FAS 142-3). FSP FAS
142-3 amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized
intangible asset under FASB Statement No. 142, "Goodwill and Other Intangible
Assets". FSP FAS 142-3 also requires expanded disclosure related to the
determination of intangible asset useful lives. FSP FAS 142-3 will be effective
for us beginning in our fiscal year 2010. We are currently evaluating the
impact, if any, that the adoption of FSP FAS 142-3 will have on our consolidated
financial statements.

                                       30
<PAGE>

     In May 2009, the FASB issued FASB Statement No. 165, "Subsequent Events"
(SFAS No. 165). SFAS No. 165 is intended to establish general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. It
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date-that is, whether that date
represents the date the financial statements were issued or were available to be
issued. This Statement is effective for interim and annual periods ending after
June 15, 2009 and is to be applied prospectively. SFAS No. 165 was effective for
us beginning the last quarter of fiscal 2009. SFAS No. 165 did not have any
impact on our consolidated financial statements.

     The Financial Accounting Standards Board ("FASB") Accounting Standards
Codification ("ASC") (Topic 105, "Generally Accepted Accounting Principles"),
became the single source for authoritative nongovernmental U.S. generally
accepted accounting principles on July 1, 2009. The Company plans to adopt FASB
ASC for periods ending after September 15, 2009.

Application of Critical Accounting Policies

Use of Estimates

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

Revenue Recognition

     We generate revenue as follows:

     o    Consulting revenue is recognized as services are performed.
     o    OptiChem(R) revenue is recognized upon shipping of the product to the
          customer.
     o    Deferred revenue represents amounts billed but not yet earned under
          consulting agreements.
     o    Technical development fees are recorded as received in accordance with
          mutually agreed upon benchmarks.

Deferred Taxes

     We recognize deferred tax assets and liabilities based on the differences
between the financial statement carrying amounts and the tax bases of assets and
liabilities. We regularly review our deferred tax assets for recoverability and
establish a valuation allowance based on historical taxable income, projected
future taxable income, and the expected timing of the reversals of existing
temporary differences. As of July 31, 2009 and July 31, 2008, we have
established a valuation allowance equal to our net deferred tax asset, as we
have not been able to determine that we will generate sufficient future taxable
income to allow us to realize the deferred tax asset.

                                       31
<PAGE>

Intangible Assets

     We amortize our intangible assets over the period the asset is expected to
contribute directly or indirectly to our future cash flows. We evaluate the
remaining useful life of each intangible asset that is being amortized each
reporting period to determine whether events and circumstances warrant a
revision to the remaining period of amortization.

     We review our intangible assets for impairment each reporting period as
discussed below under "Impairment of long-lived and intangible assets." An
impairment loss will be recognized if the carrying amount of an intangible asset
is not recoverable and its carrying amount exceeds its fair value.

Impairment of Long-Lived and Intangible Assets

     We assess the impairment of identifiable intangibles and long-lived assets
whenever events or changes in circumstances indicate that the carrying value may
not be recoverable. Factors we consider important which could trigger an
impairment review include the following:

     o    Significant under performance relative to expected historical or
          projected future operating results;
     o    Significant changes in the manner of our use of the acquired assets or
          the strategy for our overall business;
     o    Significant negative industry or economic trends;
     o    Significant decline in our stock price for a sustained period; and
     o    Our market capitalization relative to net book value.

     When we determine that the carrying value of intangibles and long-lived
assets may not be recoverable based upon the existence of one or more of the
above indicators of impairment, we measure any impairment based on a projected
discounted cash flow method using a discount rate determined by our management
to be commensurate with the risk inherent in our current business model. Our
judgments regarding the existence of impairment indicators are also based on
legal factors, market conditions and expected future operational performance of
related product lines of the identifiable intangible. Future events could cause
us to conclude that impairment indicators exist and that our identifiable assets
are impaired. Management believes that the amounts carried on our balance sheet
are recoverable, and that our intangible assets are not impaired at this time.
Our intangibles constitute a significant portion of our assets, and as a result,
any resulting impairment loss could have a material adverse impact on our
financial condition and results of operations in the future. We also evaluate
the remaining estimated useful lives of each asset each reporting period and
determine whether events or circumstances require revised useful lives.

                                       32
<PAGE>

Research and Development

     Research and development expenses are expensed as incurred. Research and
development expenses include salaries and related expenses associated with the
development of our technology and include compensation paid to engineering
personnel and fees to consultants.

Contractual Obligations

     The following table sets forth information with respect to our contractual
obligations and commercial commitments as of July 31, 2009.

                             Contractual Obligations
                             -----------------------
Payments Due By Period
                                            1 to 3         3 to 5      More than
                            Total           years           years       5 years
                            -----           -----           -----       -------

Office and Laboratory       $84,000         $84,000          $0           $0
Lease Payments (1)

Thomas V. Geimer (2)        $820,000       $720,000       $100,000        $0


     (1)  Includes monthly deposits for taxes and assessments, landlord's
          liability insurance and common facilities charges. We have a lease
          agreement that began on October 1, 2009 and expires on September 30,
          2010 for our office and laboratory located at 7000 North Broadway,
          Building 3-307, Denver, Colorado 80221.

     (2)  Includes the $75,000 payment of the deferred compensation for the
          fiscal year ended July 31, 2009, which payment was made on October 26,
          2009. Mr. Geimer's employment agreement provides for an annual base
          salary of $165,000 with annual deferred compensation of $75,000 and
          expires on December 31, 2012. See "Item 10-Executive Compensation."

Item 7A. Qualitative and Quantitative Disclosures About Market Risk

     Not applicable.

Item 8. Financial Statements and Supplementary Data

     The response to this item is submitted as a separate section of this report
beginning on page 1.

                                       33
<PAGE>

Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

     Not Applicable.

Item 9A(T). Controls and Procedures

Disclosure Controls and Procedures

     Our Chief Executive Officer and Chief Financial Officer, referred to
collectively herein as the Certifying Officer, has concluded that the Company's
disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended ("Exchange Act") were
effective as of July 31, 2009 to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is: (i) recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission rules and forms; and (ii)
accumulated and communicated to the Company's management, including its
principal executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure.

     Management's Report on Internal Control over Financial Reporting

     Management is responsible for establishing and maintaining adequate
internal control over financial reporting. A company's internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.

     Management, including the Chief Executive Officer and Chief Financial
Officer, has conducted an evaluation of the effectiveness of the Company's
internal control over financial reporting as of July 31, 2009, based on based on
the criteria for effective internal control described in Internal Control
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on its assessment, management concluded that the
Company's internal control over financial reporting was effective as of July 31,
2009.

     This Annual Report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to temporary
rules of the SEC that permit the Company to provide only management's report in
this Annual Report.

                                       34
<PAGE>

     This report shall not be deemed to be filed for purposes of Section 18 of
the Securities Exchange Act of 1934, or otherwise subject to the liabilities of
that section, and is not incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.

     Changes in Internal Control over Financial Reporting

     There was no change in our internal control over financial reporting during
the quarter ended July 31, 2009 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

     Not Applicable.

                                    PART III

Item 10. Directors, Executive Officers and Corporate Governance.

     Set forth below is certain information concerning the directors, executive
officers and key employees and consultants of the Company as of the date hereof.

Thomas V. Geimer                 62   Chief Executive Officer,
                                      Chief Financial Officer, Chairman
                                      of the Board and Secretary
David C. Howson                  65   President
Charles E. Gerretson (1)         63   Director
John D. Kucera (1)               58   Director
Steven W. Metzger                35   Senior Scientist
David W. Grainger, PhD           49   Consultant
Marin Kollef, MD                 52   Consultant

     (1) Members of the Audit and Compensation Committees

     Thomas V. Geimer has been the Chairman of the Board of Directors and a
director of Accelr8 since 1987. He currently serves as the Chief Executive
Officer, Chief Financial Officer and Secretary of the Company. Mr. Geimer is
responsible for development of our business strategy, day-to-day operations,
accounting and finance functions. Before assuming full-time responsibilities at
the Company, Mr. Geimer founded and operated an investment banking firm.

                                       35
<PAGE>

     David Howson became the President of the Company in April 2004. Previously
Mr. Howson was a consultant to the Company and had acted as the Director for
Business Development since January 2001. Mr. Howson is responsible for
coordinating business plan development and execution. Before assuming
responsibilities at the Company, Mr. Howson founded and operated the Altro
Group, LLC, a medical technology consulting firm. His clients at Altro included
medical industry leaders such as Pfizer, Boston Scientific, and Becton
Dickinson. Mr. Howson had previously founded and managed three companies for
advanced medical devices. From 1966 through 1970, Mr. Howson was enrolled in the
Neurobiology Doctoral Program at Cornell University and received a Bachelor of
Science degree from Hobart College in 1966.

     Charles E. Gerretson was appointed a director of the Company on July 19,
2003. For the past 28 years, Mr. Gerretson has served as the President of
Gerretson Realty, Inc., a Denver Colorado based real estate firm, which Mr.
Gerretson founded. Mr. Gerretson received a Bachelor of Science degree in
Business Administration from the University of Minnesota in 1968. Mr. Gerretson
was formerly a CPA with Arthur Andersen and Company and currently heads the
Company's Audit Committee.

     John D. Kucera was appointed a director on January 9, 2009. Mr. Kucera has
been self employed as a private investor since 2000. Prior to that, Mr. Kucera
handled institutional equity sales, was a Department Manager for Equities and a
Member of the Board of Directors of Hanifen Imhoff and a portfolio manager for
mutual funds and pension accounts at Founders Capital Management. Mr. Kucera
earned a Bachelor of Science degree in Finance from Colorado State University
and a Masters in Business Administration from the University of Denver.

     Employees and Consultants

     Steven W. Metzger has been a Research Scientist with the Company since
April 2001, and is now a Senior Scientist. From 2000 through 2001, Mr. Metzger
was responsible for the implementation of merging core technologies at Heska
Corporation. He was previously employed by Geo-Centers, Inc. under contract at
the Naval Research Laboratory in Washington, D.C. where he focused on
bio-warfare pathogen detection. Mr. Metzger received a Bachelor of Arts degree
in Chemistry from Colorado College in 1996.

     David W. Grainger, Ph.D. has been a consultant to the Company since January
2001. Since September 2008, Dr. Grainger has been the Professor, Department
Chair, and Inaugural George S. & Dolores Dore Eccles at the University of Utah.
From 1994 to 2008, Dr. Grainger taught as a Professor and Assistant Professor of
Chemistry at Colorado State University. From 1998 through 1999, Dr. Grainger was
the President and Chief Scientific Officer for Gamma-A Technologies, Inc. Dr.
Grainger received a Bachelor of Arts degree in Engineering from Dartmouth
College in 1983 and a Ph.D. in Pharmaceutical Chemistry from the University of
Utah in 1987. Dr. Grainger chaired the prestigious Gordon Conference on Tissue
Engineering and Biomaterials in 2001. He has been a consultant to companies such
as Novartis, Johnson & Johnson, 3M, Ciba-Geigy, and others.

                                       36
<PAGE>

     Marin Kollef, M.D., FACP, FCCP has been a consultant to the Company since
October of 2004. For the past five years Dr. Kollef has been self employed as a
consultant to Barnes-Jewish Hospital. Dr. Kollef is a Professor of Medicine at
the Washington University School of Medicine in St. Louis, Director of the
Medical Intensive Care Unit, and Director of Respiratory Care Services at
Barnes-Jewish Hospital. Dr. Kollef is a graduate of the United States Military
Academy at West Point (1979) and received his degree as Doctor of Medicine at
the University of Rochester School of Medicine and Dentistry (1983). Dr. Kollef
has advised the Company on clinical applications and the major issues involved
in managing infectious diseases in critically ill patients.

     Officers are appointed by and serve at the discretion of the Board of
Directors. Each director holds office until the next annual meeting of
shareholders or until a successor has been duly elected and qualified. All of
our officers devote their full-time to our business and affairs. There are no
family relationships between any directors, executive officers or key employees
or consultants.

Involvement in Certain Legal Proceedings

     During the past five years, none of our directors, executive officers or
persons that may be deemed promoters is or has been involved in any legal
proceeding concerning: (i) any bankruptcy petition filed by or against any
business of which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time; (ii) any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); (iii) been
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction permanently or temporarily
enjoining, barring, suspending or otherwise limiting involvement in any type of
business, securities or banking activity; or (iv) been found by a court, the SEC
or the Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law (and the judgment has not been reversed, suspended
or vacated).

Board Committees

     The Board of Directors maintains a Compensation Committee and an Audit
Committee. The members of the Compensation Committee and the Audit Committee are
Mr. Gerretson and Mr. Kucera, the Company's independent directors. The
Compensation Committee did not hold any meetings during the last fiscal year.
The Audit Committee held four meetings during the last fiscal year. The Audit
Committee's financial expert is Charles E. Gerretson. Effective as of June 9,
2000, the Board of Directors of the Company adopted a written charter for the
Audit Committee. Effective November 3, 2005, the Audit Committee adopted a
revised written charter for the Audit Committee, a copy of which was filed with
the Company's Proxy Statement at Appendix A on November 17, 2005.

                                       37
<PAGE>

     The Company does not have a nominating committee, or other committee of the
board that performs similar functions. Mr. Gerretson and Mr. Kucera are each
considered "independent" as defined in Section 121 of the NYSE Amex Equities
listing standards.

Audit Committee Report

     The Audit Committee has reviewed and discussed with management the
Company's audited financial statements for the year ended July 31, 2009.

     The Audit Committee has also discussed with Comiskey & Company, P.C. the
matters required to be discussed by Statement on Auditing Standards No. 114,
Communication with those Charged With Governance by the Auditing Standards Board
of the American Institute of Certified Public Accountants.

     The Audit Committee has received and reviewed the written disclosures and
the letter from Comiskey & Company, P.C. required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees, as
amended, and has discussed with Comiskey & Company, P.C. their independence.

     Based on the reviews and discussions referred to above, the Audit Committee
has recommended to the Board of Directors that the audited financial statements
referred to above be included in the Company's Annual Report on Form 10-K for
the year ended July 31, 2009 filed with the Securities and Exchange Commission.

Audit Committee of The Board of Directors

Charles E. Gerretson
John D. Kucera

Compliance With Section 16(a) of The Exchange Act

     Section 16(a) of the Exchange Act, generally requires the Company's
directors and executive officers and persons who own more than 10% of a
registered class of the Company's equity securities ("10% owners") to file with
the SEC initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Directors and executive
officers and 10% owners are required by Securities and Exchange Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on review of copies of such
reports furnished to us and verbal representations that no other reports were
required to be filed during the fiscal year ended July 31, 2009, all Section
16(a) filing requirements applicable to its directors, executive officers and
10% owners were met except that Mr. Kucera and Mr. Gerretson each filed one
delinquent form 4 disclosing one transaction one day late.

                                       38
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>

Code of Ethics

     The Company has adopted a code of ethics for its principal executive
officer and senior financial officers and a code of ethics and standards of
conduct, that is applicable to all directors, officers and employees.
Stockholders may request a free copy of these documents from:

Accelr8 Technology Corporation
7000 North Broadway, Building 3-307
Denver, Colorado 80221

Item 11. Executive Compensation

Compensation Discussion and Analysis

     Our executive compensation program for Thomas V. Geimer and David C.
Howson, the named executive officers (the "NEO's") is administered by the
Company's compensation committee, which is comprised of Charles E. Gerretson and
John D. Kucera.

Summary Compensation Table

     The following table summarizes the compensation of the NEO's for the fiscal
years ended July 31, 2009 and 2008:

Name and              Fiscal            Stock   Option   All other       Other
Principal Position     Year    Salary   Bonus   Awards    Awards     Compensation   Total ($)
-----------------------------------------------------------------------------------------------

Thomas V. Geimer       2009   $165,000    $0      $0        $0        $75,000(1)    $240,000
   Chief Executive     2008   $165,000    $0      $0        $0        $75,000(1)    $240,000
   Officer and
   Chief Financial
   Officer

David C. Howson        2009   $150,000    $0      $0        $0            $0        $150,000
   President           2008   $150,000    $0      $0        $0            $0        $150,000

     (1)  Represents deferred compensation for Mr. Geimer pursuant to the
          Company's deferred compensation plan, $75,000 of which vested during
          each of the fiscal years ended July 31, 2009 and 2008 but such
          payments were not made until October 26, 2009 and October 29, 2008 of
          the subsequent fiscal year.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based
Awards Table

Individual Arrangements and Employment Agreements

                                       39
<PAGE>

     The following is a description of the individual arrangements that we have
made to each of the NEO's with respect to their compensation. Mr. Geimer was
paid during the fiscal year ended July 31, 2009 in accordance with his
employment agreement with us. Mr. Howson does not have an employment agreement
with the Company. In addition, Mr. Geimer also has a Change-in-Control payment
that is described in the "Potential Payments Upon Termination" below.

Thomas V. Geimer - Chief Executive Officer, Chief Financial Officer,
Secretary and Chairman of the Board of Directors

     Effective December 1, 2008, we entered into an employment agreement with
Mr. Geimer. The agreement was negotiated and approved by the Compensation
Committee. The agreement provides for an annual base salary of $165,000 with
annual deferred compensation of $75,000. The agreement expires on December 31,
2012. The compensation committee reviewed the prior employment agreement of Mr.
Geimer in connection with the approval of Mr. Geimer's employment agreement.

     In the event of termination by mutual agreement, termination "with cause,"
as defined in the agreement, death or permanent incapacity or voluntary
termination, Mr. Geimer, or his estate, would be entitled to the sum of the base
salary and unreimbursed expenses accrued to the date of termination and any
other amounts due under the agreement. In the event of termination "without
cause," as defined in the agreement, Mr. Geimer would be entitled to the sum of
the base salary and unreimbursed expenses accrued to the date of termination and
any other amounts due under the agreement and an amount equal to the greater of
Mr. Geimer's annual base salary (12 months of salary) or any other amounts
remaining due to Mr. Geimer under the agreement, which as of July 31, 2009 would
be $985,000. Additionally, in the event of a Change in Control, any unpaid
amounts due under the initial term of the agreement for both base salary and
deferred compensation would be payable plus five times the sum of the base
salary and deferred compensation. In his positions as Chief Executive Officer
and Chief Financial Officer, Mr. Geimer exercises detailed supervision over the
operations of the Company and is ultimately responsible for the operations of
the Company. Mr. Geimer is also responsible for all duties incident to the title
of Chief Financial Officer and Secretary.

David C. Howson - President

     During the fiscal year ended July 31, 2009, we paid Mr. Howson $150,000 in
cash compensation. Mr. Howson does not have an employment agreement with the
Company. In his position as President, Mr. Howson supervises the technical
development and develop product strategies. Mr. Howson further performs all
duties incident to the title of President and such other duties as from time to
time may be assigned to him by the Board of Directors.

                                       40
<PAGE>

Outstanding Equity Awards at Fiscal Year End

     The following table sets forth information concerning options awards to
Messrs. Geimer and Howson at the fiscal year ended July 31, 2009.

Option Awards
-----------------------------------------------------------------------------------------------------
                       Number of         Number of
                      Securities        Securities
                      Underlying        Underlying
                      Unexercised       Unexercised       Option        Option
                      Option (#)        Options (#)      Exercise     Expiration
Name                  Grant Date        Exercisable   Unexercisable      Price           Date
-----------------------------------------------------------------------------------------------------
Thomas V. Geimer   December 11, 2008      100,000           0            $3.60     December 11, 2017
                    August 2, 2001        200,000           0            $1.45      August 1, 2011
                    August 26, 1999       100,000           0            $1.50    August 26, 2009 (1)
David Howson        March 16, 2005        225,000           0            $2.57      March 16, 2015
                    March 16, 2005           0            75,000         $2.57      March 16, 2015

     (1)  On August 26, 2009, Mr. Geimer exercised these options to acquire
          52,532 shares of the Company's Common Stock. Mr. Geimer paid the
          exercise price to acquire the common stock by the surrender of 47,468
          options to acquire common stock having a value of $1.66 per share,
          that is determined by subtracting the closing price of the Company's
          common stock on August 26, 2009 ($3.16) by the exercise price of the
          options ($1.50). As of October 26, 2009, these shares had not been
          issued.

Option Exercises During Fiscal Year

     There were no options exercised by the NEO's during the year ended July 31,
2009.

Potential Payments Upon Termination

Cash Compensation

     Mr. Geimer's employment agreement contains provisions under which the
Company will be obligated to pay Mr. Geimer certain compensation upon his
termination. The following tables set forth the details of the estimated
payments and benefits that would be provided to Mr. Geimer in the event that his
employment with us is terminated for any reason, including a termination for
cause, resignation or retirement, a constructive termination, a without cause
termination, death, long term disability, and termination in connection with a
change in control as of July 31, 2009.

                                       41
<PAGE>

                                                                                           Termination in
                   Termination by                                                             connection
                       Mutual        Illness or                Resignation/                 with a change
Thomas V. Geimer      Agreement      Incapacity   With cause   Without cause   Retirement     in control
---------------------------------------------------------------------------------------------------------

Cash Compensation         0               0             0        $820,000          0          $2,020,000
                                                                  (1)(2)                        (1)(2)

     (1)  Represents the amounts due under Mr. Geimer's employment agreement.
          See "Individual Arrangements and Employment Agreements."
     (2)  Includes the $75,000 payment of the deferred compensation for the
          fiscal year ended July 31, 2009, which payment was made on October 26,
          2009.
     (3)  A change of control is defined in Mr. Geimer's employment agreement to
          mean the occurrence of one or more of the following three events:
          (a)  Any person becomes a beneficial owner (as such term is defined in
               Rule 13d-3 promulgated under the Securities Exchange Act of 1934,
               as amended) directly or indirectly of securities representing 33%
               or more of the total number of votes that may be cast for the
               election of directors of the Company;
          (b)  Within two years after a merger, consolidation, liquidation or
               sale of assets involving the Company, or a contested election of
               a Company director, or any combination of the foregoing, the
               individuals who were directors of the Company immediately prior
               thereto shall cease to constitute a majority of the Board; or
          (c)  Within two years after a tender offer or exchange offer for
               voting securities of the Company, the individuals who were
               directors of the Company immediately prior thereto shall cease to
               constitute a majority of the Board.

Effects of Termination Events or Change in Control on Unvested Equity Awards

     All unvested stock option awards granted to Mr. Howson provide that upon a
change of control, the unvested stock options will not immediately vest unless
the contingencies to the stock options have been met.

Compensation of Non-Management Directors

     The Company did not pay its non-management directors any compensation
during the fiscal year ended July 31, 2009.

Cash Compensation

     We have not paid any cash compensation to our directors for their service
on our Board of Directors.

Liability Insurance

     The Company provides liability insurance for its directors and officers.
Carolina Casualty Insurance Company is the underwriter of the current coverage,
which extends until January 7, 2010. The annual cost of this coverage is
approximately $20,000.

                                       42
<PAGE>

Compensation Pursuant to Plans

Deferred Compensation Plan.

     In January 1996, we established a deferred compensation plan for our
employees. Contributions to the plan are provided for under the employment
agreement detailed above. For each of the fiscal years ended July 31, 2009 and
2008, we contributed $75,000 to the plan. The $75,000 contribution for the
fiscal year ended July 31, 2009 was made on October 26, 2009.

     On October 14, 1997, Thomas V. Geimer exercised an aggregate of 1,140,000
warrants and options to acquire 1,140,000 shares of the Company's Common Stock
at an exercise price of $0.24 per share. Under the terms of the Rabbi Trust, we
will hold the shares in trust and carry the shares as held for employee benefit
by the Company. The Rabbi Trust provides that upon Mr. Geimer's death,
disability, or termination of his employment the shares will be released ratably
over the subsequent ten (10) years, unless the Board of Directors determines
otherwise. See Note 7 to the Financial Statement for further information.

Securities Authorized For Issuance Under Compensation Plans

     The table set forth below presents the securities authorized for issuance
with respect to compensation plans under which equity securities are authorized
for issuance as of July 31, 2009:

                          Equity Compensation Plan Information
                          ------------------------------------

                                                                       Number of securities
                                                                       remaining for future
                        Number of securities   Weighted average        issuance under equity
                        to be issued upon      Exercise price of       compensation plans
                        exercise of            available outstanding   (excluding securities
                        outstanding options,   options, warrants and   reflected in the 1st
                        warrants and rights    rights                  column)
--------------------------------------------------------------------------------------------
Equity Compensation           897,500                   $2.06                 510,000
Plans approved by
security holders
--------------------------------------------------------------------------------------------
Equity Compensation               0                        0                      0
Plans not approved by
security holders
--------------------------------------------------------------------------------------------
Total                          897,500                                         510,000


                                       43
</TABLE>
<PAGE>

The 1996 Stock Option Plans

     The Board of Directors of the Company has adopted an incentive stock option
plan (the "Qualified Plan") which provides for the grant of options to purchase
an aggregate of not more than 700,000 shares of the Company's Common Stock. The
purpose of the Qualified Plan is to make options available to management and
employees of the Company in order to provide them with a more direct stake in
the future of the Company and to encourage them to remain with the Company. The
Qualified Plan provides for the granting to management and employees of
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the "Code").

     The Board of Directors of the Company has adopted a non-qualified stock
option plan (the "Non-Qualified Plan") which provides for the grant of options
to purchase an aggregate of not more than 300,000 shares of the Company's Common
Stock. The purpose of the Non-Qualified Plan is to provide certain key
consultants, independent contractors, technical advisors and directors of the
Company with options in order to provide additional rewards and incentives for
contributing to the success of the Company. These options are not incentive
stock options within the meaning of Section 422 of the Code.

     The Qualified Plan and the Non-Qualified Plan (the "Stock Option Plans")
are administered by a committee (the "Committee") appointed by the Board of
Directors which determines the persons to be granted options under the Stock
Option Plans and the number of shares subject to each option. No options granted
under the Stock Option Plans are transferable by the optionee other than by will
or the laws of descent and distribution and each option is exercisable, during
the lifetime of the optionee, only by such optionee. Any options granted to an
employee terminate 90 days after his ceasing to be an employee, except in
limited circumstances, including death of the employee, and where the Committee
deems it to be in the Company's best interests not to terminate the options.

     The exercise price of all incentive stock options granted under the
Qualified Plan must be equal to the fair market value of such shares on the date
of grant as determined by the Committee, based on guidelines set forth in the
Qualified Plan. The exercise price may be paid in cash or (if the Qualified Plan
shall meet the requirements of rules adopted under the Exchange Act) in Common
Stock or a combination of cash and Common Stock. The term of each option and the
manner in which it may be exercised will be determined by the Committee, subject
to the requirement that no option may be exercisable more than 10 years after
the date of grant. With respect to an incentive stock option granted to a
participant who owns more than 10% of the voting rights of the Company's
outstanding capital stock on the date of grant, the exercise price of the option
must be at least equal to 110% of the fair market value on the date of grant and
the option may not be exercisable more than five years after the date of grant.

     The Stock Option Plans were approved by our shareholders at a special
shareholders meeting held on November 8, 1996. At the annual meeting of
shareholders held on December 12, 2002, shareholders approved the following
amendments to the Qualified Plan and the Non-Qualified Plan: (i) the Committee
was given the power to amend and alter the Qualified Plan and the Non-Qualified
Plan so long as the amendments do not affect any outstanding options; (ii)
provide that any shares cancelled, terminated, or expired pursuant to the
Qualified Plan and the Non-Qualified Plan be made available for purposes of the
Qualified Plan and the Non-Qualified Plan; (iii) provide that the cashless
exercise provision of the Qualified Plan and the Non-Qualified Plan be in the
sole discretion of the Committee; and (iv) extended the expiration date of the
Qualified Plan and the Non-Qualified Plan until December 12, 2012.

                                       44
<PAGE>

     As of July 31, 2009, 794,000 options had been granted pursuant to the
Qualified Plan with 17,500 of these options exercised, 231,500 options that
expired, leaving 137,500 available for grant and 350,000 options had been
granted pursuant to the Non-Qualified Plan with 125,000 of these options
exercised, 5,000 options that expired, 50,000 that were cancelled and 55,000
available for grant.

2004 Omnibus Stock Option Plan

     On December 14, 2004, the shareholders approved the Company's 2004 Omnibus
Stock Option Plan (the "Omnibus Plan"). The Omnibus Plan authorizes the issuance
of up to five hundred thousand (500,000) shares of the Company's Common Stock.
The purpose of the Omnibus Plan is to promote the growth of the Company by
permitting the Company to grant options ("Options") to purchase shares of its
Common Stock, to attract and retain the best available personnel for positions
of substantial responsibility and to provide certain key employees, independent
contractors, consultants, technical advisors and directors of the Company with a
more direct stake in the future of the Company and provide an additional
incentive to contribute to the success of the Company.

     The Omnibus Plan is administered by the Compensation Committee of the Board
or any committee of the Board performing similar functions, as appointed from
time to time by the Board (the "Omnibus Committee"). Pursuant to the terms of
the Omnibus Plan, the Omnibus Committee may grant either "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986
(the "Code") or nonqualified stock options, provided that incentive stock
options may not be granted to independent contractors and consultants. The
exercise price of all incentive stock options granted under the Omnibus Plan
must be equal to the fair market value of such shares on the date of grant as
determined by the Omnibus Committee, based on guidelines set forth in the
Omnibus Plan. The exercise price of nonqualified stock options granted under the
Omnibus Plan shall be not less than 50% of the fair market value of a share on
the date of grant of such Option. The Omnibus Committee may grant on behalf of
the Company, Options to purchase shares of the Company's Common Stock to any key
employee, independent contractor, consultant, technical advisor or director.

     As of July 31, 2009, 620,000 options had been granted pursuant to the
Omnibus Plan with 5,000 of these options exercised, 130,000 expired leaving
10,000 available for grant.

                                       45
<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

     The following table sets forth certain information regarding beneficial
ownership of our Common Stock as of October 26, 2009 by: (i) each person who is
known by the Company to own beneficially more than 5% of the Company's
outstanding Common Stock; (ii) each of the Company's executive officers and
directors; and (iii) all executive officers and directors as a group. The
calculation excludes 1,129,110 shares which are held by the Rabbi Trust for the
benefit of Thomas V. Geimer. Further, Mr. Geimer does not have voting power over
the shares that are held in the Rabbi Trust. Common Stock not outstanding but
deemed beneficially owned by virtue of the right of an individual to acquire
shares is treated as outstanding only when determining the amount and percentage
of Common Stock owned by such individual. Except as noted, each person or entity
has sole voting and sole dispositve power with respect to the shares shown:

  Name and Address of Beneficial Owner                Shares Beneficially Owned
  ------------------------------------                -------------------------
                                                       Number          Percent
                                                       ------          -------

    Thomas V. Geimer (1)                               407,032           4.3%
    7000 North Broadway, Building 3-307
    Denver, Colorado 80221

    Charles E. Gerretson  (2)                          140,150           1.54%
    7000 North Broadway, Building 3-307
    Denver, Colorado 80221

    John D. Kucera (3)                                  28,663           0.3%
    7000 North Broadway, Building 3-307
    Denver, Colorado 80221

    David Howson (4)                                   302,600           3.2%
    7000 North Broadway, Building 3-307
    Denver, Colorado 80221

    Executive Officers and Directors                   878,445           8.99%
    as a Group (4 persons)

5% of greater shareholders

Merrill Lynch & Co., Inc. (5)                          793,141           8.7%


                                       46
<PAGE>

     (1)  Does not include 1,129,110 shares, which were purchased by Mr. Geimer
          upon exercise of warrants and options. Mr. Geimer exercised these
          options and warrants on October 14, 1997, and simultaneously
          contributed the shares acquired to a Rabbi Trust. See Note 7 to
          Financial Statements for further information. Includes 300,000 shares,
          which may be purchased by Mr. Geimer upon exercise of options. On
          August 26, 2009, Mr. Geimer exercised options to acquire 52,532 shares
          of the Company's Common Stock that have not yet been issued and are
          not outstanding. Mr. Geimer paid the exercise price to acquire the
          common stock by the surrender of 47,468 options to acquire common
          stock having a value of $1.66 per share, that is determined by
          subtracting the closing price of the Company's common stock on August
          26, 2009 ($3.16) by the exercise price of the options ($1.50).Includes
          400 shares held in brokerage accounts for Mr. Geimer's children, in
          which Mr. Geimer has the power and authority to dispose of the shares
          held by these accounts.

     (2)  Includes: (i) 104,050 shares owned directly by Mr. Gerretson; (ii)
          10,000 shares that may be purchased by Mr. Gerretson upon exercise of
          options which options expire on March 15, 2015, and (iii) 10,000
          shares that may be purchased by Mr. Gerretson upon exercise of options
          that expire on October 29, 2018. Also includes 16,100 shares held in
          brokerage and retirement accounts of individuals in which Mr.
          Gerretson has the power and authority to dispose of the shares held by
          these accounts. Mr. Gerretson disclaims any beneficial ownership with
          respect to the 16,100 shares.

     (3)  Includes 1,250 shares of the Company's no par value common stock held
          on behalf of Mr. Kucera's minor children in which Mr. Kucera has the
          power and authority to dispose of these shares.

     (4)  Includes 300,000 shares, which may be purchased by Mr. Howson upon
          exercise of options which options expire on March 15, 2015, of which
          75,000 stock options shall vest if and only if prior to the expiration
          date of the Options, the Company closes on a transfer for the sale of
          the Company assets or the acquisition of the Company in which the
          Company's shareholders receive aggregate consideration at closing
          equal to or greater than $250,000,000.

     (5)  Upon consummation of the merger on January 1, 2009 by and between Bank
          of America Corporation ("BAC") and Merrill Lynch and Company ("MLCO"),
          MLCO became a wholly owned subsidiary of BAC, and BAC became the
          ultimate parent and controlling entity of MLCO and its subsidiaries.

     Change in Control

     We know of no arrangements, including the pledge of our securities by any
person, that might result in a change in control.

Item 13. Certain Relationships and Related Transactions, and Director
Independence

     During fiscal year 1996, we established a deferred compensation plan for
our employees. We may make discretionary contributions to the plan based on
recommendations from the Board of Directors. As of July 31, 2009, the Board of
Directors had authorized deferred compensation totaling $1,050,000 since fiscal
year 1996 to Mr. Geimer of which $975,000 had been funded. The $75,000
representing the difference between the authorized deferred compensation and the
funded deferred compensation was funded on October 26, 2009.

                                       47
<PAGE>

     There were no other transactions or series of transactions for the fiscal
year ended July 31, 2009, nor are there any currently proposed transactions, or
series of the same to which we are a party, in which the amount involved exceeds
$60,000 and in which, to the knowledge of the Company, any director, executive
officer, nominee, 5% shareholder or any member of the immediate family of the
foregoing persons, have or will have a direct or indirect material interest.

Item 14. Principal Accountant Fees and Services

     The aggregate fees billed by Comiskey & Company, P.C. for professional
services rendered for the audit of the Company's annual consolidated financial
statements for the years ended July 31, 2009 and 2008, including the reviews of
the unaudited interim financial statements of the Company's Form 10-Q's was
approximately $37,500 and $35,000, respectively.

Tax Fees

     The aggregate fees billed by Comiskey & Company, P.C. for professional
services rendered for the tax compliance, tax advice and tax planning for the
fiscal years ended July 31, 2009 and 2008 ("Tax Fees") was $0 and $0,
respectively.

All other Fees

     Comiskey & Company, P.C. did not perform any professional services other
than those set forth above for the fiscal years ended July 31, 2009 and 2008.

Audit Committee Pre-Approval Policies

     The Audit Committee shall pre-approve all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the Company by its independent auditor, subject to any de minimus exceptions
that may be set for non-audit services described in Section 10A(i)(l)(B) of the
Exchange Act which are approved by the Committee prior to the completion of the
audit.

     None of the hours expended on the principal accountant's engagement to
audit the Company's financial statements for the most recent fiscal year were
attributed to work performed by persons other than the principal accountant's
full-time permanent employees.


                                       48
<PAGE>

Item 15. Exhibits, Financial Statement Schedules

(a) Exhibits

31.1 Certification of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

31.2 Certification of Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

32.1 Certification of Principal Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Financial Statements

The following financial statements of the Company are included in Item 7:

     Report of Independent Registered Public Accounting Firm Comiskey & Company,
     P.C.

     Balance Sheets as of July 31, 2009 and 2008

     Statements of Operations for the years ended July 31, 2009 and 2008

     Statements of Stockholders' Equity for the years ended July 31, 2009 and
     2008

     Statements of Cash Flows for the years ended July 31, 2009 and 2008

     Notes to Financial Statements


                                       49
<PAGE>


                                   SIGNATURES

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


                                            ACCELR8 TECHNOLOGY CORPORATION


Date: November 13, 2009                     By:  /s/ David C. Howson
                                            ------------------------------------
                                            David C. Howson, President

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

Date: November 13, 2009                     By:  /s/ Thomas V. Geimer
                                            ------------------------------------
                                            Thomas V. Geimer, Chairman,
                                            Secretary, Chief Executive Officer,
                                            and Chief Financial Officer


Date: November 13, 2009                     By:  /s/ Bruce McDonald
                                            ------------------------------------
                                            Bruce McDonald, Principal
                                            Accounting Officer


Date: November 13, 2009                     By:  /s/ John D. Kucera
                                            ------------------------------------
                                            John D. Kucera, Director


Date: November 13, 2009                     By:  /s/ Charles E. Gerretson
                                            ------------------------------------
                                            Charles E. Gerretson, Director



                                       50
<PAGE>

                         ACCELR8 TECHNOLOGY CORPORATION

                              FINANCIAL STATEMENTS

                             July 31, 2009 and 2008

                         ACCELR8 TECHNOLOGY CORPORATION
                                TABLE OF CONTENTS

                                                                           PAGE
                                                                          ------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                    F-2

BALANCE SHEETS                                                             F-3

STATEMENTS OF OPERATIONS                                                   F-4

STATEMENTS OF SHAREHOLDERS' EQUITY                                         F-5

STATEMENTS OF CASH FLOWS                                                   F-6

NOTES TO FINANCIAL STATEMENTS                                              F-7









                                       F-1
<PAGE>


Report of Independent Registered Public Accounting Firm
Board of Directors
Accelr8 Technology Corporation
Denver, Colorado

     We have audited the accompanying balance sheets of Accelr8 Technology
Corporation (a Colorado corporation) as of July 31, 2009 and 2008, and the
related statements of operations, shareholders' equity and cash flows for the
years ended July 31, 2009 and 2008. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Accelr8 Technology
Corporation as of July 31, 2009 and 2008, and the results of its operations and
changes in its cash flows for the years ended July 31, 2009 and 2008, in
conformity with U.S. generally accepted accounting principles.

     The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has incurred recurring losses from operations
and negative cash flows that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Denver, Colorado

October 26, 2009

/s/ COMISKEY & COMPANY
PROFESSIONAL CORPORATION


                                       F-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>

                                  ACCELR8 TECHNOLOGY CORPORATION
                                          BALANCE SHEETS
                                      JULY 31, 2009 and 2008

                                              ASSETS
                                                                            2009            2008
                                                                        ------------    ------------
Current assets:
Cash and cash equivalents                                               $    862,076    $  1,233,100
Trade accounts receivable                                                          0           6,334
Inventory (Note 3)                                                            53,445          97,268
Prepaid expenses and other (Note 4)                                           27,698          39,338
                                                                        ------------    ------------

Total current assets                                                         943,219       1,376,040
Property and equipment, net (Note 5)                                          14,655          37,398
Investments, net (Note 10)                                                 1,103,837       1,067,327
Intellectual property, net (Note 6)                                        3,169,724       3,346,701
                                                                        ------------    ------------
Total assets                                                               5,231,435    $  5,827,466
                                                                        ============    ============
                               LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                        $     39,457    $    133,628
Accrued compensation and other liabilities                                    25,883          25,889
Deferred revenue (Note 11)                                                    92,765         112,651
                                                                        ------------    ------------
Total current liabilities                                                    158,105         272,168
Long-term liabilities:
Deferred compensation                                                      1,178,836       1,142,327
                                                                        ------------    ------------
Total liabilities                                                          1,336,941       1,414,495
                                                                        ------------    ------------
Shareholders' equity (Notes 7):
Common stock, no par value;
14,000,000 shares authorized;
10,226,210 (2009) and 10,226,210 (2008) shares issued and outstanding     13,803,820      13,803,820
Contributed capital                                                        1,118,306         922,586
Accumulated (deficit)                                                    (10,754,032)    (10,039,835)
         Shares held for employee benefit (1,129,110 shares at cost)        (273,600)       (273,600)
                                                                        ------------    ------------
Total shareholders' equity                                                 3,894,494       4,412,971
                                                                        ------------    ------------
Total liabilities and shareholders' equity                              $  5,231,435    $  5,827,466
                                                                        ============    ============


                          See accompanying notes to financial statements.

                                                F-3
<PAGE>

                              ACCELR8 TECHNOLOGY CORPORATION
                                 STATEMENTS OF OPERATIONS
                          FOR YEARS ENDED JULY 31, 2009 and 2008

                                                                  2009            2008
                                                              ------------    ------------
Revenues (Note 9 and 11):
Technical development Fees                                    $  1,200,000    $    200,000
OptiChem (TM) revenue                                               69,886          75,520
License Fees                                                             0         100,000
Option Fees                                                              0         100,000
                                                              ------------    ------------
Total revenues                                                $  1,269,886    $    475,520
                                                              ------------    ------------
Cost of sales                                                            0           9,649
                                                              ------------    ------------
Gross profit                                                     1,269,886         465,871
                                                              ------------    ------------
Costs and expenses:
Research and development                                           745,927         880,984
General and administrative                                         919,706       1,001,284
Amortization (Note 6)                                              247,345         243,044
Depreciation (Note 5)                                               22,743          51,182
Marketing and sales                                                 13,284          17,005
                                                              ------------    ------------
Total costs and expenses                                         1,949,005       2,193,499
                                                              ------------    ------------
(Loss) from operations                                            (679,119)     (1,727,628)
                                                              ------------    ------------
Other (expense) income:
Interest and dividend income                                        18,328          63,075

Unrealized holding gain (loss) on investments (Note 2)             (53,406)        (69,590)
Miscellaneous                                                            0          53,801
                                                              ------------    ------------
Total other income                                                 (35,078)         47,286
                                                              ------------    ------------
Net (loss)                                                    $   (714,197)   $ (1,680,342)
                                                              ============    ============
Net loss per share:  Basic and diluted net (loss) per share   $      (0.07)   $      (0.17)
                                                              ============    ============
Weighted average shares outstanding                             10,226,210      10,059,717
                                                              ============    ============


                      See accompanying notes to financial statements.

                                            F-4
<PAGE>

                                                  ACCELR8 TECHNOLOGY CORPORATION
                                                STATEMENTS OF SHAREHOLDERS' EQUITY


                                                                                                        Shares
                                                                                        Retained         Held
                                                                                        Earnings         For             Total
                                   Common Stock           Stock To    Contributed     (Accumulated      Employee      Shareholders'
                                Shares       Amount       Be Issued     Capital         Deficit)        Benefit          Equity
                              ----------   ------------   ---------   ------------    ------------    ------------    ------------

Balances, July 31, 2007        9,971,210   $ 12,878,020        --     $    635,280    $ (8,359,493)   $   (273,600)   $  4,880,207
                              ----------   ------------   ---------   ------------    ------------    ------------    ------------
Net Loss                            --             --          --             --        (1,680,342)           --        (1,680,342)
Exercise of Options               55,000        125,800        --             --              --              --           125,800
Sale of Common Shares            200,000        800,000        --             --              --              --           800,000
Extension of Stock Option
Expiration Dates                    --             --          --           15,956            --              --            15,956
Stock Option Expense Under
SFAS 123R                           --             --          --          271,350            --              --           271,350
                              ----------   ------------   ---------   ------------    ------------    ------------    ------------
Balances, July 31, 2008       10,226,210     13,803,820        --          922,586     (10,039,835)       (273,600)      4,412,971

Net Loss                            --             --          --             --          (714,197)           --          (714,197)
Exercise of Options                 --             --          --             --              --              --                 0
Extension of Stock Option
Expiration Dates                    --             --          --           24,777            --              --            24,777
Stock Option Expense Under
SFAS 123R                           --             --          --          170,943            --              --           170,943
                              ----------   ------------   ---------   ------------    ------------    ------------    ------------
Balances, July 31, 2009       10,226,210   $ 13,803,820        --     $  1,118,306    $(10,754,032)   $   (273,600)   $  3,894,494
                              ----------------------------------------------------------------------------------------------------


                                          See accompanying notes to financial statements.

                                                              F-5
<PAGE>

                               ACCELR8 TECHNOLOGY CORPORATION
                                  STATEMENTS OF CASH FLOWS
                         FOR THE YEARS ENDED JULY 31, 2009 and 2008

                                                                       2009           2008
                                                                   -----------    -----------
Cash flows from operating activities:
     Net loss                                                      $  (714,197)   $(1,680,342)
     Adjustments to reconcile net (loss) to net cash
       (used in) operating activities:
       Depreciation                                                     22,743         51,182
       Amortization                                                    247,345        243,044
       Fair value of stock options
          granted for services                                         195,720        287,306
       Unrealized (gain) loss on investments                            53,406         69,590
       Realized (gain) loss on sale of investments, interest and
          dividends reinvested                                         (14,916)       (34,368)
       Realized (gain) on sale of fixed assets                               0        (51,761)
       (Increase) decrease in assets:
          Accounts receivable                                            6,334           (709)
          Inventory                                                     43,823         10,587
          Prepaid expense and other                                     11,640        (14,872)
       Increase (decrease) in liabilities:
          Accounts payable                                             (94,171)        69,029
          Accrued liabilities                                               (6)        (6,497)
          Deferred revenue                                             (19,886)        54,305
          Deferred compensation                                         36,509         39,778
                                                                   -----------    -----------
       Net cash (used in) operating activities                        (225,656)      (963,728)
Cash flows from investing activities:
     Proceeds on sale of fixed assets                                        0         70,000
Purchase of equipment and patent costs                                 (70,368)      (117,641)
     Contribution to deferred compensation trust                       (75,000)       (75,000)
                                                                   -----------    -----------
Net cash provided by (used in) investing activities                   (145,368)      (122,641)
Cash flows from financing activities
     Issuance of common stock                                                0        925,800
                                                                   -----------    -----------
Net cash provided (used) in financing activities                             0        925,800
                                                                   -----------    -----------
Increase (decrease) in cash and cash equivalent                       (371,024)       160,569
Beginning balance:                                                   1,233,100      1,393,669
                                                                   -----------    -----------
Ending Balance:                                                    $   862,076    $ 1,233,100
                                                                   ===========    ===========


                       See accompanying notes to financial statements.

                                             F-6
</TABLE>
<PAGE>

                         ACCELR8 TECHNOLOGY CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 ORGANIZATION AND NATURE OF BUSINESS

     We were incorporated on May 26, 1982, under the laws of the State of
Colorado. Prior to the acquisition of the OpTest(TM) suite of technologies
("OpTest"), which occurred in January of 2001, Accelr8 Technology Corporation
("Accelr8" or the "Company") was primarily a provider of software tools and
consulting services. We provided software tools and consulting services for
system modernization solutions for Digital Equipment Corporation VMS legacy
systems. We sold the assets related to the software business on July 30, 2004.

     On January 18, 2001, the Company acquired the OpTest(TM) suite of
technologies from DDx, Inc. ("DDx"). The purchase of the assets of DDx provided
the Company with a proprietary surface chemistry and quantitative instruments.

     Since the acquisition of the assets, we have focused primarily upon
research and development relating to the technologies acquired, and the
development of revenue producing products related to that technology. We have
manufactured and marketed OptiChem(R) coated microarraying slides ("OptiChem")
for a variety of custom applications for specific customers. During the fiscal
years ended July 31, 2009 and 2008, our primary focus shifted to development of
a program to integrate our OptiChem(R) surface chemistry ("OptiChem"),
QuanDx(TM) light-scattering quantitative assay instrumentation ("QuanDx"), and
YoDx(TM) assay acceleration process ("YoDx") into a novel system for rapid
bacterial identification and antibiotic resistance testing, the BACcel(TM)
system ("BACcel"). We are developing an innovative rapid diagnostic platform,
the BACcel(TM) system, intended for rapid diagnosis in life-threatening
bacterial infections.


NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

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

                                       F-7
<PAGE>

Concentration of Credit Risk

     Financial instruments that potentially subject the Company to
concentrations of credit risk consist primarily of cash equivalents and accounts
receivable, including receivables from major customers.

     The Company places its cash equivalents with a high credit quality
financial institution. The Company periodically maintains cash balances at a
commercial bank in excess of the Federal Deposit Insurance Corporation insurance
limit of $250,000. At July 31, 2009 and 2008, the Company's uninsured cash
balance was approximately $650,275 and $983,100; however, this amount is
invested under a repurchase agreement with the bank and is collateralized by
securities of the United States Federal agencies with approximate market values
of 102% of the investment.

     The Company grants credit to domestic and international clients in various
industries. Exposure to losses on accounts receivable is principally dependent
on each client's financial position. The Company performs ongoing credit
evaluations of its clients' financial condition.

Estimated Fair Value of Financial Instruments

     The carrying amounts of cash and cash equivalents, investments and other
long-term liabilities approximates fair value at July 31, 2009 and 2008.

     The carrying value of all other financial instruments potentially subject
to valuation risk, principally consisting of accounts receivable and accounts
payable, also approximate fair value.

     The following methods and assumptions were used to estimate the fair value
of financial instruments:

     Cash and Cash Equivalents - The carrying amount approximates fair value.
Investments - The carrying amount is based on unadjusted quoted prices in active
markets that are accessible at the measurement date for identical, unrestricted
assets or liabilities. (Level 1 inputs as defined by SFAS 157). Other Long-Term
Liabilities - The carrying amount approximates fair value.

Cash and Cash Equivalents

     All highly liquid investments with an original maturity of three months or
less at time of purchase are considered to be cash equivalents.

Investments

     The Company accounts for its investments in accordance with FAS 115. All
investments are recorded as trading and reported at fair value with unrealized
gains and losses reported with current earnings.

                                       F-8
<PAGE>

Inventory

     Inventory is maintained by specific identification and valued at cost using
the first-in first out method. Amounts of any particular inventory item are
small and are used depending on particular characteristics.

Property and Equipment

     Property and equipment are recorded at cost. Maintenance and repairs are
charged to expense as incurred and expenditures for major improvements are
capitalized. Gains and losses from retirement or replacement are included in
costs and expenses. Depreciation of property and equipment is computed using the
straight-line method over the estimated useful life of the assets, ranging from
five to seven years.

Research And Development

     Research and development costs charged to operations for the years ended
July 31, 2009 and 2008 were $745,927 and $880,984, respectively.

Intellectual Property

     Intellectual property is amortized over the period the asset is expected to
contribute directly or indirectly to the Company's future cash flows. The
Company evaluates the remaining useful life of each intellectual property that
is being amortized each reporting period to determine whether events and
circumstances warrant a revision to the remaining period of amortization.
Included in intellectual property are patents, trademarks and technology.
Intellectual properties are amortized over their estimated useful lives of 20
years.

Long-lived Assets

     Long-lived assets and certain identifiable intangibles to be held and used
by the Company are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company continuously evaluates the recoverability of its
long-lived assets based on estimated future cash flows from and the estimated
fair value of such long-lived assets, and provides for impairment if such
undiscounted cash flows or the estimated fair value are insufficient to recover
the carrying amount of the long-lived asset.

Going Concern

     As shown in the accompanying financial statements, we have incurred
significant operating losses of $714,197 and $1,680,342 during the fiscal years
ended July 31, 2009 and July 31, 2008. As of July 31, 2009, we have limited
financial resources until such time that we are able to generate positive cash
flow from operations. These factors raise substantial doubt about our ability to
continue as a going concern. Our ability to achieve and maintain profitability
and positive cash flow is dependent upon our ability to locate profitable
mineral properties, generate revenue from our planned business operations, and
control exploration cost. Management plans to fund its future operation by joint
venturing, obtaining additional financing, and attaining additional commercial
production. However, there is no assurance that we will be able to obtain
additional financing from investors or private lenders, or that additional
commercial production can be attained.

                                      F-9
<PAGE>

     The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.

Revenue Recognition

Technical Development Fees

     Technical consulting fee revenue was recorded as received in accordance
with mutually agreed upon benchmarks.

Consulting Services

     Consulting revenue is recognized as services are performed.

OptiChem(R) Slides

     Revenue is recognized when the Company ships the product to customers.

Sales Returns and Allowances

     Allowances on accounts receivable and notes receivable are recorded when
circumstances indicate collection is doubtful for particular accounts
receivable. Receivables are written off if reasonable collection efforts prove
unsuccessful. The Company provides for sales returns and allowances on a
specific account basis.

Deferred Revenue

     Deferred revenue represents amounts billed but not yet earned under
existing agreements.

Income Taxes

     The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes,"
which requires an asset and liability approach to financial accounting and
reporting for income taxes. Deferred income tax assets and liabilities are
computed annually for differences between the financial statement basis and the
income tax basis of assets and liabilities that will result in taxable or
deductible amounts in the future. Such deferred income tax computations are
based on enacted tax laws and rates applicable to the years in which the
differences are expected to affect taxable income. A valuation allowance is
established when necessary to reduce deferred income tax assets to the amounts
expected to be realized.

                                      F-10
<PAGE>

Earnings Per Share

     The Company follows SFAS No. 128, "Earnings Per Share," which requires
companies to present basic earnings per share and diluted earnings per share.
Basic earnings (loss) per share includes no dilution and is computed by dividing
income (loss) available to common shareholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per share reflect the
potential dilution of securities that could share in the earnings of an entity.

     The Company's net losses for the periods presented cause the inclusion of
potential common stock instruments outstanding to be antidilutive. During the
years ended July 31, 2009 and 2008, Common Stock options exercisable for
1,165,000 and 1,085,000 shares of Common Stock were not included in diluted loss
per share as the effect was antidilutive due to the Company recording losses in
each of those years. In addition, at July 31, 2009 and July 31, 2008, 200,000
contingently issuable options were not included in loss per share. See Note 8.

Stock Based Compensation

     The Company follows SFAS No. 123R in valuing all options granted using the
Black-Scholes option-pricing model. The fair value is recorded as consulting
expense as the vesting period lapses. Options granted for which vesting is
contingent based on future performance are measured at their then current fair
value at each period end, until vested.

     The Company elected to use the modified prospective transition method for
adopting SFAS No. 123R, which required the recognition of stock-based
compensation cost on a prospective basis; therefore, prior period financial
statements have not been restated. Under this method, the provisions of SFAS No.
123R are applied to all awards granted after the adoption date and to awards not
yet vested with unrecognized expense at the adoption date based on the estimated
fair value at grant date as determined under the original provisions of SFAS No.
123. The impact of forfeitures that may occur prior to vesting is also estimated
and considered in the amount recognized. Pursuant to the requirements of SFAS
No. 123R, the Company will continue to present the pro forma information for
periods prior to the adoption date.

     The Company has historically used the Black-Scholes option pricing model to
determine the fair value of stock options on the date of grant. This model
derives the fair value of stock options based on certain assumptions related to
expected stock price volatility, expected option life, risk-free interest rate
and dividend yield. The Company's expected volatility is based on the historical
volatility of the Company's stock price over the most recent period commensurate
with the expected term of the stock option award. The estimated expected option
life is based primarily on historical employee exercise patterns. The Company
has not paid dividends in the past and does not have any plans to pay any
dividends in the future. See Note 7 for further information.

                                      F-11
<PAGE>

Comprehensive Income (loss)

     The Company follows SFAS No. 130, "Reporting Comprehensive Income," which
establishes standards for reporting and displaying comprehensive income (loss)
and its components (revenues, expenses, gains and losses) in a full set of
general-purpose financial statements. The Company has no other items that would
be included in comprehensive income (loss).

Recent Accounting Pronouncements

     In February 2007, the FASB issued FASB Statement No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities-Including an Amendment of
FASB Statement No. 115" (SFAS No. 159). This standard permits an entity to
choose to measure many financial instruments and certain other items at fair
value. The fair value option permits a company to choose to measure eligible
items at fair value at specified election dates. A company will report
unrealized gains and losses on items for which the fair value option has been
elected in earnings after adoption. SFAS No. 159 was effective for us on August
1, 2008. We did not elect to measure any eligible items at fair value.
Therefore, the adoption of SFAS No. 159 had no impact on the consolidated
financial statements.

     In April 2008, the FASB issued FASB Staff Position FAS 142-3,
"Determination of the Useful Life of Intangible Assets" (FSP FAS 142-3). FSP FAS
142-3 amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized
intangible asset under FASB Statement No. 142, "Goodwill and Other Intangible
Assets". FSP FAS 142-3 also requires expanded disclosure related to the
determination of intangible asset useful lives. FSP FAS 142-3 will be effective
for us beginning in our fiscal year 2010. We are currently evaluating the
impact, if any, that the adoption of FSP FAS 142-3 will have on our consolidated
financial statements.

     In May 2009, the FASB issued FASB Statement No. 165, "Subsequent Events"
(SFAS No. 165). SFAS No. 165 is intended to establish general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. It
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date-that is, whether that date
represents the date the financial statements were issued or were available to be
issued. This Statement is effective for interim and annual periods ending after
June 15, 2009 and is to be applied prospectively. SFAS No. 165 was effective for
us beginning the last quarter of fiscal 2009. Subsequent events were evaluated
through November 3, 2009.

                                      F-12
<PAGE>

     The Financial Accounting Standards Board ("FASB") Accounting Standards
Codification ("ASC") (Topic 105, "Generally Accepted Accounting Principles"),
became the single source for authoritative nongovernmental U.S. generally
accepted accounting principles on July 1, 2009. The Company plans to adopt FASB
ASC for periods ending after September 15, 2009.


NOTE 3 INVENTORY

     The Company purchases raw materials (custom chemicals and glass substrates)
for producing OptiChem(R) coated slides. Raw material on hand at the end of each
reporting period is priced at cost based on the first-in first-out method. There
was no work-in-process or finished goods inventory as of July 31, 2009 and July
31, 2008 as slides currently are made for specific orders and shipped as
produced.


NOTE 4 PREPAID EXPENSES AND OTHER CURRENT ASSETS

     Prepaid expenses and other current assets for the year ended July 31, 2009
were $27,698 as compared to $39,338 for the year ended July 31, 2008.


NOTE 5 PROPERTY AND EQUIPMENT

     Property and equipment are recorded at cost and consisted of the following
at July 31:

                                                        2009             2008
                                                     ---------        ---------

Computer equipment                                   $  21,102        $  21,102
Laboratory and scientific equipment                    302,981          302,981
Furniture and fixtures                                  16,601           16,601
                                                     ---------        ---------

Total property and equipment                           340,684          340,684
Accumulated depreciation                              (326,029)        (303,286)
                                                     ---------        ---------

Net property and equipment                           $  14,655        $  37,398
                                                     =========        =========

     Depreciation expense for the years ended July 31, 2009 and 2008 was $22,743
and $51,182, respectively.


                                      F-13
<PAGE>

NOTE 6 INTELLECTUAL PROPERTY

     Intellectual property consisted of the following at July 31:

                                                   2009                 2008
                                                -----------         -----------

OptiChem(R) technologies                        $ 4,454,538         $ 4,454,538
Patents                                             482,000             411,632
Trademarks                                           49,019              49,019
                                                -----------         -----------

                                                  4,985,557           4,915,189
Accumulated amortization                         (1,815,833)         (1,568,488)
                                                -----------         -----------

                                                $ 3,169,724         $ 3,346,701
                                                ===========         ===========

     Future amortization expense for the intangible assets is estimated as
follows:

                   Years Ending July 31,
                   ---------------------

                     2010                   247,000
                     2011                   247,000
                     2012                   247,000
                     2013                   247,000
                   Thereafter             2,181,724
                                 ------------------------------

Total future amortization                 $3,169,724
                                 ==============================

     Intellectual properties are recorded at cost and are being amortized on a
straight-line basis over their estimated useful lives of 20 years, the patent
and patent application life of the OptiChem(R) Technologies. Amortization
expense was $247,345 and $243,044 respectively, for the years ended July 31,
2009 and 2008. The Company routinely evaluates the recoverability of its
long-lived assets based upon estimated future cash flows from and estimated fair
value of such long-lived assets. If in management's judgment, the anticipated
undiscounted cash flows or estimated fair value are insufficient to recover the
carrying amount of the long-lived asset, the Company will determine the amount
of the impairment and the value of the asset will be written down. As of July
31, 2009 and 2008, management believes that the amounts carried on our balance
sheet are recoverable, and there was no impairment of the Company's long-lived
assets.


NOTE 7 SHAREHOLDERS' EQUITY

Stock Option Plans

     The Company has option agreements with key executives and two stock-based
compensation plans, which are discussed below:

Option And Warrant Agreement With Key Executive

     In fiscal 1998, options for the purchase of 1,129,110 shares held by the
Chief Executive Officer ("Executive Options and Warrants") were exercised and
placed into a "Rabbi" Trust as discussed in Note 10. Such shares are issuable
upon the occurrence of retirement, death or termination of the Chairman's
employment over a ten-year period after such occurrence, unless the Board of
Directors determines otherwise.

                                      F-14
<PAGE>

     In accordance with generally accepted accounting principles, the Company
has included the assets and liabilities of the "Rabbi" Trust in its financial
statements, and the shares of the Company's common stock held by the "Rabbi"
Trust have been treated as treasury stock for financial reporting purposes and
have no voting rights.

Qualified Stock Option Plan

     The Company has reserved 700,000 shares of its authorized but unissued
common stock for stock options to be granted to officers and employees of the
Company under its Incentive Stock Option Plan (the "Incentive Plan"). The
exercise price of each option, which has a maximum ten-year life, is established
by the Company's compensation committee on the date of grant.

     As of July 31, 2009, 794,000 options had been granted pursuant to the
Qualified Plan with 17,500 of these options exercised, 231,500 options that
expired, leaving 137,500 available for grant.

Non-qualified Stock Option Plan

     The Company has reserved 300,000 shares of its authorized but unissued
common stock for stock options to be granted to independent contractors,
technical advisors and directors of the Company under its Non-Qualified Stock
Option Plan (the "Non-Qualified Plan"). The exercise price of each option, which
has a maximum ten-year life, is established by the Company's compensation
committee on the date of grant.

     As of July 31, 2009, 350,000 options had been granted pursuant to the
Non-Qualified Plan with 125,000 of these options exercised, 5,000 options that
expired, 50,000 that were cancelled and 55,000 available for grant.

Omnibus Stock Option Plan

     On December 14, 2004 the Shareholders approved an Omnibus Stock Option Plan
and reserved 500,000 shares of its authorized but unissued common stock for
stock options to be granted to employees, independent contractors, technical
advisors and directors of the Company.

     As of July 31, 2009, 620,000 options had been granted pursuant to the
Omnibus Plan with 5,000 of these options exercised, 130,000 expired, leaving
10,000 available for grant.

                                      F-15
<PAGE>

Contingent Options

     In connection with the purchase of the YoDx technology discussed above, the
Company agreed to issue an additional 200,000 stock options with the same terms
upon the earlier of (a) the Company achieving certain accumulated revenue levels
associated with the YoDx technology, as defined in the agreement, or (b) a
change in control of the Company prior to the expiration date of the options. As
of July 31, 2008, the contingent provisions had not been met and the options
expired; however, an additional grant of 60,000 options to acquire shares of the
Company's common stock was issued in August 2008 in settlement of a disagreement
relating to the cancellation such options. The Company has reserved a sufficient
number of shares for such options.

Accounting for Employee Based Option Plans

     As is discussed in Note 2, the Company accounts for all option grants using
the Black-Scholes option pricing model in accordance with SFAS 123R for options
granted or extended.

     As of July 31, 2009 and 2008, total unrecognized share-based compensation
cost related to unvested stock options was approximately $10,176. For the years
ended July 31, 2009 and 2008, the Company recognized $170,943 in stock based
compensation costs related to the issuance of options to employees under SFAS
123R. For the year ended July 31, 2009 and 2008, the total recognized stock
based compensation costs related to the extension of currently existing, fully
vested options was $24,777 and $15,956. These costs were calculated in
accordance with SFAS No. 123R and are reflected in operating expenses.

     The following weighted-average assumptions were used for grants for the
year ended July 31, 2009: no dividend yield; risk free interest rate between
2.37% and 5%; expected life between 3 and 10 years; and expected volatility
between 44% and 66%. The weighted average fair value of options granted during
the fiscal year ended July 31, 2009 was $3.67. The weighted average remaining
contractual life of options outstanding at July 31, 2009 was 4.13 years. The
expected forfeiture rate used was 37%.





                                      F-16
<PAGE>

     The following table summarizes information on stock option activity for the
Omnibus Plan, the Qualified Plan and the Non-Qualified Plan, excluding the
200,000 contingent options noted above:

                                                                   Weighted
                                                                    Average
                                                      Exercise     Exercise
                                         Number of    Price Per    Price Per
                                           Shares       Share        Share
                                         ---------   -----------     -----

Options outstanding, July 31, 2007        897,500   $1.45 - $3.20    $2.06
 Granted                                  290,000     2.50-4.50       3.57

Exercised                                 (55,000)    2.25-2.66       2.29
Expired                                   (47,500)    2.10-3.10       2.68
Options Outstanding July 31, 2008        1,085,000    1.45-4.00       2.42
Granted                                    95,000     2.25-3.00       2.52
Exercised                                     0            0          0
Expired                                   (15,000)    2.20-2.50       2.40
Options Outstanding July 31, 2009        1,165,000   $1.45-$4.50     $2.43
                                         ---------   -----------     -----

     As of July 31, 2009 and 2008, 1,087,500 and 798,750 options outstanding
were currently exercisable and carried weighted average exercise prices of $
2.16 and $2.00 respectively. The following table summarizes information about
stock options outstanding and exercisable at July 31, 2009:

                                       Outstanding               Exercisable
                                       -----------               -----------
                             Weighted
                             Average                                    Weighted
                             Remaining                                  Average
Range of                     Contractual   Weighted Average             Exercise
Exercise Price    Number     Life          Exercise Price    Number     Price
--------------------------------------------------------------------------------
$1.45-$1.50      375,000     1.4           $1.47             375,000     $1.47
$2.00-$2.36      172,500     2.6           $2.24             172,500     $2.24
$2.57-$2.90      380,000     4.9           $2.57             352,500     $2.58
$3.00-$4.50      237,500     5.9           $3.89             187,500     $3.72
$1.45-$4.52    1,165,000     3.6           $2.43           1,087,500     $2.34




                                      F-17
<PAGE>

NOTE 8 INCOME TAXES

     The following items comprise the Company's net deferred tax assets
(liabilities) as of July 31:

                                                            2009           2008
                                                     -----------    -----------
Deferred tax assets:
Net operating loss                                   $ 5,041,000    $ 4,850,000
Deferred revenue and gains                              (100,000)      (100,000)
Depreciation and amortization                            (50,000)       (51,000)
Stock options issued to consultants and employees        360,000        288,000
General business credit                                  265,000        266,000
Contribution and timing differences                       10,000          8,000
                                                     -----------    -----------
Total                                                  5,506,000      5,261,000
Less valuation allowance                              (5,506,000)    (5,261,000)
                                                     -----------    -----------
Net deferred tax asset                               $         0    $         0
                                                     ===========    ===========

     As of July 31, 2009, a valuation allowance increase of $245,000 has been
recorded for the deferred tax asset, as Management has determined that it is
more likely than not that the deferred tax asset will not be realized.

     Total income tax expense (benefit) differed from the amounts computed by
applying the U.S. Federal statutory tax rates to pre-tax loss for the fiscal
years ended July 31, 2009 and 2008 as follows:

                                                       2009        2008
                                                       ----        ----
Total expense (benefit) computed by:
Applying the U.S. Federal statutory rate              (34.0)%     (34.0)%
State income taxes, net of Federal tax benefit         (3.0)       (3.0)
General business credits and other                     (3.8)       (3.8)
Valuation allowance                                    40.8        40.8
                                                    ----------------------
Effective tax rate (benefit)                             -%          -%
                                                    ======================

     The Company has unused net operating loss carry forward of approximately
$13,300,000 and general business credits of approximately $265,000 that are
available to offset future income taxes. The net operating loss will expire
beginning in 2013 and the general business tax credits expire from 2009 through
2024.


                                      F-18
<PAGE>

NOTE 9 MAJOR CUSTOMERS AND FOREIGN REVENUE

     For the years ending July 31, 2009 and 2008, revenues were $1,269,886 and
$475,520, respectively. Of the total revenues, revenues from one customer were
$1,200,000 (94.4%) in the year ended July 31, 2009 and $200,000 (63.0%) for the
year ended July 31, 2008. See "Subsequent Events."

Foreign Revenues were as follows for the fiscal years ended July 31,:

Foreign Revenues                  2009              2008
                               -------           -------
OptiChem (R) Revenues          $67,212           $45,695
License Fees                         0            50,000
Option Fees                          0                 0
Consulting Fees                      0                 0
                               -------           -------
          Total                $67,212           $95,695


NOTE 10 COMMITMENTS

Investments And Deferred Compensation Arrangement

     In January 1996, the Company established a deferred compensation plan for
key employees. Contributions to the plan are provided for under the employment
agreement with Thomas V. Geimer, which is detailed at the end of this note. For
each of the fiscal years ended July 31, 2009 and 2008, the Company contributed
$75,000 to the plan which was accrued but unpaid by the Company at year end. On
October 26, 2009, $75,000 was paid to the deferred compensation plan.

     The following information is provided related to the trust assets, which
consist of cash and equity securities as of July 31, 2009 and 2008. These
assets, which based upon the Company's intended use of the investments, have
been classified as trading securities. Unrealized holding gains or loss on
trading securities are included in other income (expense).

                                          2009               2008
                                   -----------        -----------
Cost basis                         $ 1,157,243        $ 1,136,917
Unrealized holding gain (loss)         (53,406)           (69,590)
                                   -----------        -----------
     Aggregate fair value          $ 1,103,837        $ 1,067,327
                                   ===========        ===========

     Deferred compensation related to the Rabbi Trust was $1,178,836 and
$1,142,327 as of July 31, 2009 and 2008, respectively. The difference between
the aggregate fair value and the deferred compensation amounts represents the
award of $75,000 for each of the years ended July 31, 2009 and 2008 which was
accrued but unpaid by the Company at year end.


                                      F-19
<PAGE>

Operating Lease

     The Company is a party to a lease for its office and laboratory space that
expires on September 30, 2010. Total rent expense including maintenance fees was
approximately $72,573 and $71,480 during the years ended July 31, 2009 and 2008,
respectively. Future minimum lease payments on the office and laboratory lease
are as follows:

       Year Ending          Premises
           July 31              Rent
           -------              ----
              2010           $59,454
              2011             9,908
                           ----------
                             $69,362
                           ==========

Employment Agreement

     Effective December 1, 2008, we entered into an employment agreement with
Mr. Geimer. The agreement was negotiated and approved by the Compensation
Committee. The agreement provides for an annual base salary of $165,000 with
annual deferred compensation of $75,000. The agreement expires on December 31,
2012. The compensation committee reviewed the prior employment agreement of Mr.
Geimer in connection with the approval of Mr. Geimer's employment agreement. In
the event of termination by mutual agreement, termination "with cause," as
defined in the agreement, death or permanent incapacity or voluntary
termination, Mr. Geimer, or his estate, would be entitled to the sum of the base
salary and unreimbursed expenses accrued to the date of termination and any
other amounts due under the agreement. In the event of termination "without
cause," as defined in the agreement, Mr. Geimer would be entitled to the sum of
the base salary and unreimbursed expenses accrued to the date of termination and
any other amounts due under the agreement and an amount equal to the greater of
Mr. Geimer's annual base salary (12 months of salary) or any other amounts
remaining due to Mr. Geimer under the agreement, which as of July 31, 2009 would
be $985,000. Additionally, in the event of a Change in Control, any unpaid
amounts due under the initial term of the agreement for both base salary and
deferred compensation would be payable plus five times the sum of the base
salary and deferred compensation.

NOTE 11 DEFERRED REVENUE

     Deferred revenue was $92,765 and $112,651, respectively at the fiscal years
ended July 31, 2009 and 2008. Deferred revenue consists of prepaid royalty fees
from SCHOTT. All services and material requirements for the Feasibility Testing
Agreement with Promega have been completed as of September 12, 2006, and no
further work on the part of Accelr8 is required. Therefore, deferred revenue of
$22,000 for prepaid technology license fees was recognized in the first quarter
of fiscal year 2008.



                                      F-20
<PAGE>

NOTE 12 SUBSEQUENT EVENTS

     On September 24, 2009, BD declined to exercise its licensing option and
will no longer participate in the technical development of the BACcel(TM)
system. Accordingly, we will not receive revenues from BD in the future.


























                                      F-21