##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 001-33775
 Nanosphere, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    36-4339870(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)4088 Commercial Avenue
    
    Northbrook, Illinois 60062(Address of principal executive offices)
    
    (Zip Code)
 (847) 400-9000
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o
 o þ




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##### 



NANOSPHERE, INC.
 INDEX
 Part I. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Balance Sheets
    
    
    1Statements of Operations
    
    
    2Statements of Cash Flows
    
    
    3Notes to Financial Statements
    
    
    4-10Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11-16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    16Part II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    17Item 1A. Risk Factors
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 4. Submission of Matters to a Vote of Security Holders
    
    
    17Item 6. Exhibits
    
    
    18Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



PART I.
FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Nanosphere, Inc.
(A Development Stage Company)
 
 Balance Sheets
 (Unaudited)
 June 30,
    
    
    December 31,2008
    
    
    2007CURRENT ASSETS:Cash and cash equivalents
    
    $
    93,990,208
    
    
    $
    114,312,573Accounts receivable
    
    
    482,023
    
    
    
    100,799Inventories
    
    
    2,561,433
    
    
    
    1,903,004Other current assets
    
    
    610,169
    
    
    
    670,402Total current assets
    
    
    97,643,833
    
    
    
    116,986,778PROPERTY AND EQUIPMENT Net
    
    
    7,456,955
    
    
    
    7,033,597INTANGIBLE ASSETS  Net of accumulated amortization
    
    
    5,090,680
    
    
    
    4,930,752OTHER ASSETS
    
    
    144,556
    
    
    
    163,553TOTAL
    
    $
    110,336,024
    
    
    $
    129,114,680CURRENT LIABILITIES:Accounts payable
    
    $
    2,491,649
    
    
    $
    2,221,522Accrued compensation
    
    
    1,032,677
    
    
    
    1,303,355Accrued license fees
    
    
    675,168
    
    
    
    393,473Accrued financing costs
    
    
    
    
    
    
    778,731Other current liabilities
    
    
    1,011,811
    
    
    
    969,962Long term debt  current portion
    
    
    4,532,983
    
    
    
    3,597,823Lease payable  current portion
    
    
    40,518
    
    
    
    37,037Total current liabilities
    
    
    9,784,806
    
    
    
    9,301,903LONG-TERM LIABILITIES:Lease payable  noncurrent portion
    
    
    
    
    
    
    21,433Long term debt  noncurrent portion
    
    
    5,495,718
    
    
    
    7,440,804Total liabilities
    
    
    15,280,524
    
    
    
    16,764,140COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common stock, $0.01 par value; 100,000,000 shares
authorized; 
22,228,496 shares and 22,192,005
shares issued and outstanding as of June 30, 2008
and December 31, 2007, respectively
    
    
    222,285
    
    
    
    305,174Preferred stock, $0.01 par value; 10,000,000
shares authorized; no shares issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    273,093,161
    
    
    
    271,765,776Warrants to acquire common stock
    
    
    5,423,771
    
    
    
    5,424,551Deficit accumulated during the development stage
    
    
    (183,683,717
    )
    
    
    (165,144,961
    )Total stockholders equity
    
    
    95,055,500
    
    
    
    112,350,540TOTAL
    
    $
    110,336,024
    
    
    $
    129,114,680
   1




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##### Table of Contents



Nanosphere, Inc.
(A Development Stage Company)
 
 Statements of Operations
 (Unaudited)
 Period FromDecember 30, 1999(Date of Incorporation)Three Month Periods Ended June 30,
    
    
    Six Month Periods Ended June 30,
    
    
    Through2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    June 30, 2008REVENUE:Grant and contract revenue
    
    $
    
    
    
    $
    503,245
    
    
    $
    272,612
    
    
    $
    726,503
    
    
    $
    9,090,240Product sales
    
    
    194,715
    
    
    
    7,025
    
    
    
    498,119
    
    
    
    53,670
    
    
    
    907,139Total revenue
    
    
    194,715
    
    
    
    510,270
    
    
    
    770,731
    
    
    
    780,173
    
    
    
    9,997,379COSTS AND EXPENSES:Cost of product sales
    
    
    226,176
    
    
    
    3,188
    
    
    
    575,605
    
    
    
    18,367
    
    
    
    834,573Research and development
    
    
    6,028,926
    
    
    
    5,277,939
    
    
    
    11,871,121
    
    
    
    10,219,047
    
    
    
    90,606,312Sales, general, and administrative
    
    
    3,777,507
    
    
    
    3,079,443
    
    
    
    7,186,405
    
    
    
    5,256,583
    
    
    
    39,928,861Total costs and expenses
    
    
    10,032,609
    
    
    
    8,360,570
    
    
    
    19,633,131
    
    
    
    15,493,997
    
    
    
    131,369,746Loss from operations
    
    
    (9,837,894
    )
    
    
    (7,850,300
    )
    
    
    (18,862,400
    )
    
    
    (14,713,824
    )
    
    
    (121,372,367
    )OTHER INCOME (EXPENSE):Change in fair value of
convertible derivative liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,777,723
    )Change in fair value of preferred
stock warrants
    
    
    
    
    
    
    (379,599
    )
    
    
    
    
    
    
    (276,612
    )
    
    
    (4,551,236
    )Foreign exchange loss
    
    
    (235
    )
    
    
    (13,770
    )
    
    
    (24,645
    )
    
    
    (13,770
    )
    
    
    (77,007
    )Interest expense  related party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (388,804
    )Interest expense
    
    
    (545,591
    )
    
    
    (563,840
    )
    
    
    (1,130,628
    )
    
    
    (823,748
    )
    
    
    (3,115,753
    )Interest income
    
    
    546,698
    
    
    
    374,355
    
    
    
    1,478,917
    
    
    
    758,433
    
    
    
    5,301,254Total other income (expense)
    
    
    872
    
    
    
    (582,854
    )
    
    
    323,644
    
    
    
    (355,697
    )
    
    
    (20,609,269
    )NET LOSS
    
    
    (9,837,022
    )
    
    
    (8,433,154
    )
    
    
    (18,538,756
    )
    
    
    (15,069,521
    )
    
    
    (141,981,636
    )Accumulated convertible preferred
stock dividends
    
    
    
    
    
    
    (1,689,812
    )
    
    
    
    
    
    
    (3,180,329
    )
    
    
    (10,300,417
    )Convertible preferred stock
redemption value adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (608,940
    )
    
    
    (31,401,664
    )NET LOSS ATTRIBUTABLE TO COMMON
STOCK
    
    $
    (9,837,022
    )
    
    $
    (10,122,966
    )
    
    $
    (18,538,756
    )
    
    $
    (18,858,790
    )
    
    $
    (183,683,717
    )Net loss per common share  basic
and diluted
    
    $
    (0.44
    )
    
    $
    (10.85
    )
    
    $
    (0.84
    )
    
    $
    (20.22
    )Weighted average number of common
shares outstanding  basic and
diluted
    
    
    22,202,620
    
    
    
    932,646
    
    
    
    22,197,395
    
    
    
    932,646
   2




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##### Table of Contents



Nanosphere, Inc.
(A Development Stage Company)
 
 Statements of Cash Flows
 (Unaudited)
 Period FromDecember 30, 1999(Date of Incorporation)Six Month Periods Ended June 30,
    
    
    Through2008
    
    
    2007
    
    
    June 30, 2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (18,538,756
    )
    
    $
    (15,069,521
    )
    
    $
    (141,981,636
    )Adjustments to reconcile net loss to net cash used in operating
activities:Depreciation and amortization
    
    
    1,310,785
    
    
    
    837,162
    
    
    
    6,316,638Amortization of financing costs and accretion of debt discount
    
    
    406,904
    
    
    
    279,409
    
    
    
    1,078,384Loss from write-off of intangible assets
    
    
    
    
    
    
    206,683
    
    
    
    776,607Loss from disposal of fixed assets
    
    
    326,291
    
    
    
    
    
    
    
    326,291Share-based compensation
    
    
    1,078,217
    
    
    
    790,247
    
    
    
    3,403,843Change in fair value of preferred stock warrants
    
    
    
    
    
    
    276,612
    
    
    
    4,551,236Change in fair value of convertible derivative liability
    
    
    
    
    
    
    
    
    
    
    17,777,723Changes in operating assets and liabilities:Accounts receivable
    
    
    (381,224
    )
    
    
    (54,984
    )
    
    
    (482,023
    )Inventories
    
    
    (658,429
    )
    
    
    (304,060
    )
    
    
    (2,561,433
    )Other current assets
    
    
    62,863
    
    
    
    (220,015
    )
    
    
    (661,433
    )Other assets
    
    
    
    
    
    
    10,830
    
    
    
    (77,630
    )Accounts payable
    
    
    (27,130
    )
    
    
    (368,282
    )
    
    
    1,963,588Accrued and other current liabilities
    
    
    (188,630
    )
    
    
    876,704
    
    
    
    2,300,013Net cash used in operating activities
    
    
    (16,609,109
    )
    
    
    (12,739,215
    )
    
    
    (107,269,832
    )CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from investment maturities
    
    
    
    
    
    
    
    
    
    
    53,894Purchases of property and equipment
    
    
    (1,520,137
    )
    
    
    (1,122,347
    )
    
    
    (12,930,137
    )Investments in intangible assets
    
    
    (161,472
    )
    
    
    (572,238
    )
    
    
    (5,794,287
    )Net cash used in investing activities
    
    
    (1,681,609
    )
    
    
    (1,694,585
    )
    
    
    (18,670,530
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from related party notes payable
    
    
    
    
    
    
    
    
    
    
    6,339,210Proceeds from issuance of debt
    
    
    
    
    
    
    12,500,000
    
    
    
    12,500,000Repayment of long term debt
    
    
    (1,400,463
    )
    
    
    (142,736
    )
    
    
    (1,567,136
    )Payments on capital lease obligation
    
    
    (17,952
    )
    
    
    (15,887
    )
    
    
    (77,167
    )Proceeds from principal and interest on CEO note receivable
    
    
    
    
    
    
    64,942
    
    
    
    1,530,740Deferred financing fees
    
    
    
    
    
    
    (114,565
    )
    
    
    (114,565
    )Proceeds from the issuance of common stock, net of offering expenses
    
    
    (778,731
    )
    
    
    
    
    
    
    102,220,002Proceeds from warrant redemptions
    
    
    2,189
    
    
    
    
    
    
    
    1,288,809Proceeds from stock option exercises
    
    
    163,310
    
    
    
    
    
    
    
    283,335Proceeds from the issuance of Series A convertible
 preferred stock
    
    
    
    
    
    
    
    
    
    
    3,008,357Proceeds from the issuance of Series B convertible 
preferred stock
    
    
    
    
    
    
    
    
    
    
    5,375,001Proceeds from the issuance of Series C convertible 
preferred stock
    
    
    
    
    
    
    
    
    
    
    15,000,000Proceeds from the issuance of Series C-2 convertible 
preferred stock
    
    
    
    
    
    
    
    
    
    
    27,350,087Proceeds from the issuance of Series D convertible 
preferred stock
    
    
    
    
    
    
    
    
    
    
    46,793,897Net cash provided by (used in) financing activities
    
    
    (2,031,647
    )
    
    
    12,291,754
    
    
    
    219,930,570NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (20,322,365
    )
    
    
    (2,142,046
    )
    
    
    93,990,208CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    114,312,573
    
    
    
    29,112,429
    
    
    
    CASH AND CASH EQUIVALENTS  End of period
    
    $
    93,990,208
    
    
    $
    26,970,383
    
    
    $
    93,990,208NONCASH INVESTING AND FINANCING ACTIVITIES:Equipment acquired under capital lease
    
    $
    
    
    
    $
    
    
    
    $
    117,685Capital expenditures included in accounts payable
    
    
    527,961
    
    
    
    141,811
    
    
    
    527,961Patent costs capitalized and included in accounts payable
    
    
    
    
    
    
    162,171
    
    
    
    Patent and license costs capitalized and included in accrued liabilities
    
    
    597,000
    
    
    
    766,112
    
    
    
    597,000Common stock issued for note payable  related party
    
    
    
    
    
    
    
    
    
    
    1,440,000Payment of Series A convertible preferred stock dividends in additional
shares of Series A convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    410,5396% dividends earned on Series C-2 and Series D convertible preferred
stock
    
    
    
    
    
    
    3,180,329
    
    
    
    9,889,878Conversion of Preferred Stock, including accumulated dividends on
Series C-2 and Series D convertible preferred stock into common stock
    
    
    
    
    
    
    
    
    
    
    116,281,865Conversion of convertible derivative liability to additional paid-in
capital
    
    
    
    
    
    
    
    
    
    
    47,554,882Conversion of preferred stock warrant liability to warrants to acquire
common stock
    
    
    
    
    
    
    
    
    
    
    5,424,551Conversion of related party notes payable and accrued interest of
$204,335, into Series C-2 convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    7,212,156Conversion of related party notes payable and accrued interest of
$177,358 into Series D convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    6,516,568Equity offering transaction costs included in other current assets and
accrued liabilities
    
    
    
    
    
    
    271,573
   3




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##### Table of Contents



Nanosphere, Inc.
(A Development Stage Company)
 
 Notes to Financial Statements
 As of June 30, 2008 and December 31, 2007, and
 For the three and six month periods ended June 30, 2008 and 2007 and
 for the Cumulative Period From December 30, 1999
 (Date of Incorporation) through June 30, 2008
 (Unaudited)
 1. Description of Business
    Basis of Presentation
  Use of Estimates
  4




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##### Table of Contents



Nanosphere, Inc.
(A Development Stage Company)
 Notes to Financial Statements  (Continued)
(Unaudited)
 2. Net Loss Per Common Share
  
 Three and six month periods ended June 30,2008
    
    
    2007Stock options
    
    
    3,368,919
    
    
    
    3,173,548Convertible preferred stock
    
    
    
    
    
    
    12,291,401Convertible preferred stock warrants
    
    
    
    
    
    
    1,445,997Common stock warrants
    
    
    1,300,119
    
    
    
    Total
    
    
    4,669,038
    
    
    
    16,910,946
 3. Intangible Assets
  June 30, 2008
    
    
    December 31, 2007Carrying
    
    
    Accumulated
    
    
    
    
    
    
    Carrying
    
    
    AccumulatedValue
    
    
    Amortization
    
    
    Net
    
    
    Value
    
    
    Amortization
    
    
    NetIntellectual property Licenses
    
    $
    2,122,177
    
    
    $
    (258,852
    )
    
    $
    1,863,325
    
    
    $
    1,870,178
    
    
    $
    (90,244
    )
    
    $
    1,779,934Patents
    
    
    3,492,029
    
    
    
    (264,674
    )
    
    
    3,227,355
    
    
    
    3,370,323
    
    
    
    (219,505
    )
    
    
    3,150,818Total
    
    $
    5,614,206
    
    
    $
    (523,526
    )
    
    $
    5,090,680
    
    
    $
    5,240,501
    
    
    $
    (309,749
    )
    
    $
    4,930,752
  Years Ending December 312008 (Period from July 1 to December 31)
    
    $
    225,0192009
    
    
    292,3772010
    
    
    222,3772011
    
    
    222,3772012
    
    
    222,377Thereafter
    
    
    1,279,624
    5




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##### Table of Contents



Nanosphere, Inc.
(A Development Stage Company)
 Notes to Financial Statements  (Continued)
(Unaudited)
 4. Related Party Transactions
   5. Equity Incentive Plan
   Expected dividend yield
    
    
    0
    %Expected volatility
    
    
    70
    %Risk free interest rate
    
    
    3.05
    %Weighted-average expected option life
    
    
    6.44 yearsEstimated weighted-average fair valueOn the date of grant based on the above assumptions
    
    $
    7.32Estimated forfeiture rate for unvested options
    
    
    4.6
    %
    6




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##### Table of Contents



Nanosphere, Inc.
(A Development Stage Company)
 Notes to Financial Statements  (Continued)
(Unaudited)
  WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateNumber of
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    Value of OptionsOutstanding  January 1, 2008
    
    
    3,141,530
    
    
    $
    4.97Granted
    
    
    328,000
    
    
    $
    11.21Exercised
    
    
    (36,291
    )
    
    $
    4.50Expired
    
    
    (2,290
    )
    
    $
    19.25Forfeited
    
    
    (62,030
    )
    
    $
    4.50Outstanding  June 30, 2008
    
    
    3,368,919
    
    
    $
    5.59
    
    
    
    8.41
    
    
    $
    9,811,514Exercisable  June 30, 2008
    
    
    744,017
    
    
    $
    6.11
    
    
    
    7.64
    
    
    $
    2,142,487Vested and Expected to Vest  June 30, 2008
    
    
    3,248,174
    
    
    $
    5.59
    
    
    
    8.40
    
    
    $
    9,458,739
   6. License Agreements
   7. Stockholders Equity
 Convertible Preferred Stock
   7




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##### Table of Contents



Nanosphere, Inc.
(A Development Stage Company)
 Notes to Financial Statements  (Continued)
(Unaudited)
    Series of Stock to
    
    Number of
    
    
    Expirationwhich the Warrant is Exercisable
    
    Warrants
    
    
    DateCommon  exercise price of $13.13 per share
    
    
    1,135,194
    
    
    April 2011Common  exercise price of $8.75 per share
    
    
    164,925
    
    
    April 2013
  8. Leases
   Operating
    
    
    CapitalYears Ending December 31
    
    Leases
    
    
    Leases2008 (Period from July 1 to December 31)
    
    $
    254,790
    
    
    $
    21,0902009
    
    
    520,197
    
    
    
    22,1082010
    
    
    220,898Total minimum lease payments
    
    $
    995,885
    
    
    
    43,198Less amounts representing interest
    
    
    
    
    
    
    (2,680
    )Net present value
    
    
    
    
    
    
    40,518Less current portion of net minimum lease payments
    
    
    
    
    
    
    (40,518
    )Long-term portion of net minimum lease payments
    
    
    
    
    
    $
    
 9. Long Term Debt
    8




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##### Table of Contents



Nanosphere, Inc.
(A Development Stage Company)
 Notes to Financial Statements  (Continued)
(Unaudited)
  2008 (July 1 to December 31)
    
    $
    2,197,3592009
    
    
    4,818,2112010
    
    
    3,917,293Total
    
    $
    10,932,863
 10. Inventory
  June 30, 2008
    
    
    December 31, 2007Work-in-process component parts
    
    $
    1,150,537
    
    
    $
    1,361,227Finished goods
    
    
    1,410,896
    
    
    
    541,777Total
    
    $
    2,561,433
    
    
    $
    1,903,004
 11. Property and Equipment
  June 30, 2008
    
    
    December 31, 2007Total property and equipment  at cost
    
    $
    12,949,062
    
    
    $
    11,729,127Less accumulated depreciation
    
    
    (5,492,107
    )
    
    
    (4,695,530
    )Net property and equipment
    
    $
    7,456,955
    
    
    $
    7,033,597
 12. New Accounting Standards
    9




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Nanosphere, Inc.
(A Development Stage Company)
 Notes to Financial Statements  (Continued)
(Unaudited)
     10




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This Quarterly Report on Form 10-Q contains forward-looking statements about us and our
industry that involve substantial risks and uncertainties. All statements, other than statements of
historical facts, included in this Quarterly Report on Form 10-Q regarding our strategy, future
operations, future financial position, future net sales, projected expenses, prospects and plans
and objectives of management are forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors that may cause our actual results, levels of
activity, performance or achievement to be materially different from those expressed or implied by
the forward-looking statements.
 In some cases, you can identify forward-looking statements by terms such as anticipate,
believe, estimate, expect, intend, may, might, plan, project, will, would,
should, could, can, predict, potential, continue, objective, or the negative of these
terms, and similar expressions intended to identify forward-looking statements. However, not all
forward-looking statements contain these identifying words. These forward-looking statements
reflect our current views about future events and are based on assumptions and subject to risks and
uncertainties. Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Actual events or results could differ materially from those expressed
or implied by these forward-looking statements as a result of various factors.
 These forward-looking statements represent our estimates and assumptions only as of the date
of this Quarterly Report on Form 10-Q . Unless required by U.S. federal securities laws, we do not
intend to update any of these forward-looking statements to reflect circumstances or events that
occur after the statement is made or to conform these statements to actual results. The following
discussion should be read in conjunction with the consolidated financial statements and notes
thereto appearing elsewhere in this Quarterly Report on Form 10-Q . Our actual results may differ
materially from those anticipated in these forward-looking statements as a result of various
factors, including those set forth under Risk Factors and elsewhere in this Quarterly Report on
Form 10-Q.
 Business Overview
    11




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Financial Operations Overview
 Revenue
  Cost of Product Sales
  Research and Development Expenses
  Sales, General and Administrative Expenses
  Interest Income
  Interest Expense
   12




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##### Table of Contents



Three Month Period Ended June 30, 2008 Compared to the Three Month Period Ended June 30, 2007
 Revenues
  Cost of Product Sales
  Research and Development Expenses
   Sales, General and Administrative Expenses
  Interest Expense
  Interest Income
  Six Month Period Ended June 30, 2008 Compared to the Six Month Period Ended June 30, 2007
 Revenues
   13




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Cost of Product Sales
  Research and Development Expenses
   Sales, General and Administrative Expenses
  Interest Expense
  Interest Income
  Liquidity and Capital Resources
   14




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##### Table of Contents




    
    the level of research and development investment required to maintain and improve our
technology;
 
    
    the amount and growth rate of our revenues;
 
    
    changes in product development plans needed to address any difficulties in manufacturing
or commercializing the Verigene System and enhancements to our system;
 
    
    the costs of filing, prosecuting, defending and enforcing patent claims and other
intellectual property rights;
 
    
    competing technological and market developments;
 
    
    our need or decision to acquire or license complementary technologies or acquire
complementary businesses; and
 
    
    changes in regulatory policies or laws that affect our operations.
  15




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##### Table of Contents



Contractual Obligations and Commitments
  Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
      16




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PART II.
OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 4. Submission of Matters to a Vote of Security Holders
   For
    
    
    WithheldWilliam P. Moffitt III
    
    
    17,874,059
    
    
    
    1,939,184Mark Slezak
    
    
    19,775,347
    
    
    
    37,896Jeffrey R. Crisan
    
    
    17,572,519
    
    
    
    2,240,724Andre de Bruin
    
    
    19,775,542
    
    
    
    37,701Chad A. Mirkin
    
    
    17,862,253
    
    
    
    1,950,990James J. Nahirny
    
    
    17,571,946
    
    
    
    2,241,297Sheli Z. Rosenberg
    
    
    19,775,542
    
    
    
    37,701
  ForFor
    
    
    19,796,687Against
    
    
    14,206Abstain
    
    
    2,350
  17




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##### Table of Contents



Item 6. Exhibits, Financial Statement Schedules
 Exhibit Number
    
    Exhibit Description31.1
    
    
    Certification of Chief Executive Officer pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *31.2
    
    
    Certification of Chief Financial Officer pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *32.1
    
    
    Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 *32.2
    
    
    Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 *
 
 *
    
    Filed herewith  18




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##### Table of Contents



SIGNATURES
  NANOSPHERE, INC.By:
    /s/ William P. MoffittWilliam P. MoffittPresident and Chief Executive OfficerDate:  August 14, 2008By:
    /s/ Roger MoodyRoger MoodyChief Financial Officer and TreasurerDate:  August 14, 2008  19




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##### Table of Contents



EXHIBIT INDEX
 Exhibit Number
    
    Exhibit Description31.1
    
    
    Certification of Chief Executive Officer pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *31.2
    
    
    Certification of Chief Financial Officer pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *32.1
    
    
    Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 *32.2
    
    
    Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 *
  20