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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
 (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007,oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number: 000-31745
      THIRD WAVE TECHNOLOGIES,
    INC.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

39-1791034(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)502 S. Rosa Road, Madison, WI

53719(Address of principal executive
    offices)

(Zip Code)   (888) 898-2357 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Exchange Act:
    Common stock, $.001 par value per share
    preferred stock purchase rights
 (Title of Class)
  Securities registered pursuant to Section 12(g) of the
    Exchange Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K: Form 10-K




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##### 





THIRD
    WAVE TECHNOLOGIES
  FORM 10-K
    FOR THE YEAR ENDED DECEMBER 31, 2007
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.

Business


4Item 1A.

Risk Factors


13Item 1B.

Unresolved Staff Comments


24Item 2.

Properties


25Item 3.

Legal Proceedings


25Item 4.

Submission of Matters to a Vote of Security
    Holders


25PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


26Item 6.

Selected Financial Data


28Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


28Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


37Item 8.

Financial Statements and Supplementary Data


38Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


63Item 9A.

Controls and Procedures


63Item 9B.

Other Information


63PART IIIItem 10.

Directors, Executive Officers and Corporate Governance


64Item 11.

Executive Compensation


64Item 12.

Security Ownership of Certain Beneficial Owners and Management
    and Related Stockholder Matters


64Item 13.

Certain Relationships and Related Transactions, and Director
    Independence


64Item 14.

Principal Accountant Fees and Services


64PART IVItem 15.

Exhibits, Financial Statements and Schedules


64Signatures


65Amendment No.1 to Second Amended and Restated Employment Agreement with Kevin T. ConroyAmendment No.1 to Amended and Restated Employment Agreement with Maneesh AroraAmended and Restated Employment Agreement with Cindy S. AhnAmendment No.1 to Employment Agreement with John BellanoAmendment No.1 to Employment Agreement with Jorge GarcesAmendment No.1 to Employment Agreement with Greg HamiltonEmployment Agreement with Ivan Trifunovich2008 Incentive PlanLong Term Incentive Plan No.5List of SubsidiariesConsent of Grant Thornton LLPSection 302 CEO CertificationSection 302 CFO CertificationSection 1350 CEO CertificationSection 1350 CFO Certification   2




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FORWARD-LOOKING
    STATEMENTS
  Form 10-K Form 10-K, Form 10-K
    Form 10-K,
  Form 10-K,
  ® ® ® ® ® tm tm tm
 3




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  OVERVIEW
    10-15%
  THIRD
    WAVE MISSION AND CORPORATE STRATEGY
      
    Grow our global clinical molecular diagnostic revenue through
    our expanding product menu by using our strong distribution and
    thought-leader networks;
    Continue to expand our pipeline of molecular diagnostic products
    and enhance our product capabilities; and
    Partner when appropriate to optimize our opportunities in
    molecular diagnostics and in markets where the Invader chemistry
    can create unique competitive advantages.  TECHNOLOGY
  Invader
    Chemistry
      ®
 4




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INDUSTRY
    BACKGROUND
          LIMITATIONS
    OF CONVENTIONAL METHODS VERSUS THE THIRD WAVE SOLUTION
    Name

Platform

StatusPCR

Target Amplification

Most commonly used technologyTMA/NASBA

Target Amplification

Market leader for blood screeningHybrid Capture

Signal Amplification

Currently used primarily for HPV testingInvader

Signal Amplification

Adoption across multiple applicationsInvader Plus

Target/Signal Amplification

New capability for numerous applications       
    Accuracy In the study submitted to the FDA as
    part of the Companys application for clearance of its
    Invader UGT1A1 Molecular Assay, it was 100% accurate compared to
    DNA sequencing, the standard for genotype determination.
    Ease of Use Invader products are extremely
    easy to use for technicians of any skill level. Assay setup
    requires a simple addition of the reagents to the prepared
    sample and can be completed with minimal hands-on time. During
    the incubation at a single temperature, technicians are free to
    perform other duties. 5




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
    Flexibility/Scalability The Invader chemistry
    is highly scalable and automation-friendly, allowing any
    Clinical Laboratory Improvement Amendments (CLIA) certified high
    complexity lab, regardless of size, to take advantage of its
    benefits.  PRODUCTS
    AND PRODUCT CANDIDATES
    Molecular
    Diagnostics
  PRODUCTS
    ON THE MARKET  UNITED STATES
  InVitro
    Diagnostic (IVD) Devices
  
    Invader UGT1A1 Molecular Assay  Analyte
    Specific Reagents/Research Use Only (ASRs/RUO)
  
    Hepatitis C virus genotyping (HCVg)
    Cystic Fibrosis Transmembrane Conductance Regulator gene (CFTR
    InPlextm)
    Human Papillomavirus (HPV)
    Connexin 26 (35delG)
    Connexin 26 (167delT)
    Factor V (Leiden)
    Factor II (prothrombin)
    Apolipoprotein E (ApoE) (C112R)
    Apolipoprotein E (ApoE) (R158C)
    Plasminogen Activator Inhibitor-1 (PAI-1) (4G/5G)
    Platelet Glycoprotein IIIa (PL A1/A2) (Leu 33 Pro, T1565C)
    Warfarin (VKORC1 (-1639)), (CYP2C9*2), (CYP2C9*3)
    Rett (McCP2)
    Methylenetetrahydrofolate Reductase (MTHFR)
    CYP2C19
    CYP2C9
    CYP450  PRODUCTS
    ON THE MARKET  EUROPEAN ECONOMIC AREA (EEA)
  InVitro
    Diagnostic Devices  CE Mark
  
    HPV High Risk Molecular Assay
    Factor V Leiden (G1691A)
    Factor II (FII G20210A)
    Methylenetetrahydrofolate Reductase (MTHFR) (C677T) 6




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
    Methylenetetrahydrofolate Reductase (MTHFR) (A1298C)
    Apolipoprotein E (ApoE) (C112R)
    Apolipoprotein E (ApoE) (R158C)
    Plasminogen Activator Inhibitor-1 (PAI-1) (4G/5G)
    Platelet Glycoprotein IIIa (PL A1/A2) (Leu 33 Pro, T1565C)
    Connexin 26 (35delG)
    Connexin 26 (167delT)  PRODUCTS
    IN DEVELOPMENT OR BEING ASSESSED FOR TECHNICAL FEASIBILITY AND
    COMMERCIAL VIABILITY
  
    Additional HPV offerings
    Additional CFTR offerings
    HBV Viral Load
    Herpes simplex virus (HSV 1 & 2)
    Cytomegalovirus (CMV)
    Microbacterium
    Methicillin-resistant Staphylococcus aureus (MRSA)
    Chlamydia
    Gonorrhea
    Additional infectious disease targets
    Hepatitis B virus
    Micro RNA panels    MANUFACTURING
         7




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MARKETING
    AND SALES
            and/or
    Form 10-K.
    INTELLECTUAL
    PROPERTY
   8




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and/or and/or
            COMPETITION
   9




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and/or
            GOVERNMENT
    REGULATION
    Analyte
    Specific Reagents (ASRs)
     10




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510(k)
    Clearance or PMA Approval Requirements
              Other
    FDA Regulatory Requirements
   11




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International
    Regulations and Environmental and Safety Laws and
    Regulations
        Research
    Use Only Products
    RESEARCH
    AND DEVELOPMENT
   12




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EMPLOYEES
    AVAILABLE
    INFORMATION
  Form 10-K, Form 10-Q, Form 8-K,
  ITEM 1A.
    RISK
    FACTORS  RISKS
    RELATED TO OUR BUSINESS
  WE HAD
    AN ACCUMULATED DEFICIT OF $194.6 MILLION AT DECEMBER 31, 2007,
    AND EXPECT TO CONTINUE TO INCUR SUBSTANTIAL OPERATING LOSSES FOR
    THE FORESEEABLE FUTURE.
      FLUCTUATIONS
    IN OUR QUARTERLY REVENUES AND OPERATING RESULTS MAY
    NEGATIVELY IMPACT OUR STOCK PRICE.
    
    the volume and timing of orders for our products;
    changes in the mix of our products offered;
    the timing of payments we receive under collaborative
    agreements, as well as our ability to recognize these payments
    as revenues;
    the number, timing and significance of new products and
    technologies introduced by our competitors;
    third-party intellectual property, which may require significant
    investments in licensing or royalties, or which may materially
    impede our ability to sell products;
    our ability to develop, obtain regulatory clearance, market and
    introduce new and enhanced products on a timely basis;
    changes in the cost, quality and availability of equipment,
    reagents and components required to manufacture or use our
    products; and 13




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
    availability of third-party reimbursement to users of our
    clinical products.    OUR
    TECHNOLOGIES AND COMMERCIAL PRODUCTS MAY NOT BE COMMERCIALLY
    VIABLE OR SUCCESSFUL, WHICH COULD ADVERSELY AFFECT OUR
    BUSINESS.
    WE ARE
    RELIANT ON OUR ABILITY TO MANUFACTURE AND DEVELOP PRODUCTS. IF
    THERE IS A DISRUPTION TO THE MANUFACTURING OF OUR PRODUCTS, IT
    MAY HAVE AN ADVERSE AFFECT TO OUR BUSINESS.
      WE MAY
    NOT BE ABLE TO CONTINUE TO OUTSOURCE THE MANUFACTURE OF
    COMPONENTS FOR OUR PRODUCTS ON FAVORABLE TERMS, IF AT ALL, AND
    EVEN SUCCESSFUL OUTSOURCING CREATES RISK DUE TO OUR
    RESULTING RELIANCE ON VENDORS.
   14




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OUR
    LIMITED SALES AND MARKETING EXPERIENCE AND CAPACITY MAY
    ADVERSELY AFFECT OUR ABILITY TO GROW AND TO COMPETE SUCCESSFULLY
    IN COMMERCIALIZING OUR POTENTIAL PRODUCTS.
      OUR
    CUSTOMER BASE IS DOMINATED BY A SMALL NUMBER OF LARGE CLINICAL
    TESTING LABORATORIES AND MANY OF OUR CONTRACTS WITH KEY
    CUSTOMERS ARE SHORT-TERM CONTRACTS AND/OR SUBJECT TO EARLY
    TERMINATION.
  and/or and/or
  WE MAY
    REQUIRE ADDITIONAL FINANCING FOR OUR FUTURE OPERATING PLANS.
    FINANCING MAY NOT BE AVAILABLE ON ACCEPTABLE TERMS, IF AT
    ALL.
      
    our progress with our research and development programs;
    the need we may have to pursue FDA clearances or approvals of
    our products; 15




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
    our level of success in selling our products and technologies;
    our ability to establish and maintain successful collaborations;
    the costs we incur in securing intellectual property rights,
    whether through patents, licenses or otherwise;
    the costs we incur in enforcing and defending our patent claims
    and other intellectual property rights;
    the timing of debt repayment obligations and additional capital
    expenditures;
    the need to respond to competitive pressures; and
    the possible acquisition of complementary products, businesses
    or technologies.    COMMERCIALIZATION
    OF OUR TECHNOLOGIES MAY DEPEND ON STRATEGIC
    PARTNERSHIPS AND COLLABORATIONS WITH OTHER COMPANIES, AND
    IF OUR CURRENT OR FUTURE PARTNERSHIPS AND COLLABORATIONS ARE NOT
    SUCCESSFUL, WE MAY EXPERIENCE DIFFICULTY COMMERCIALIZING
    OUR TECHNOLOGIES AND PRODUCTS.
      WE ARE
    IN A HIGHLY COMPETITIVE INDUSTRY AND MARKETPLACE. COMPETITIVE
    DEVELOPMENTS, INCLUDING NEW TECHNOLOGIES THAT RENDER OURS
    LESS COMPETITIVE OR OBSOLETE, COULD SERIOUSLY HARM OUR
    BUSINESS.
  and/or
  
    diagnostic, biotechnology, pharmaceutical, healthcare, chemical
    and other companies;
    academic and scientific institutions; 16




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
    governmental agencies;
    public and private research organizations; and
    clinical laboratories.        WE MAY
    BE UNABLE TO PROTECT OUR PROPRIETARY METHODS AND TECHNOLOGIES
    AND MAY BE SUBJECT TO CLAIMS OF INFRINGEMENT OF THE INTELLECTUAL
    PROPERTY RIGHTS OF OTHERS.
         17




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OTHER
    RIGHTS AND MEASURES THAT WE RELY UPON TO PROTECT OUR
    INTELLECTUAL PROPERTY MAY NOT BE ADEQUATE TO PROTECT OUR
    PRODUCTS AND COULD REDUCE OUR ABILITY TO COMPETE IN THE
    MARKET.
    and/or
  
    the agreements may be breached;
    we may have inadequate remedies for a breach;
    the employees, collaborators, consultants and other third
    parties may apply for patents on improvements to our
    technologies without assigning ownership rights to us;
    proprietary information could be disclosed to our
    competitors; or
    others may independently develop substantially equivalent
    proprietary information and techniques or otherwise gain access
    to our trade secrets or disclose such technologies.    IF WE
    FAIL TO RETAIN OUR KEY PERSONNEL AND HIRE, TRAIN AND RETAIN
    QUALIFIED EMPLOYEES, WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY,
    WHICH COULD RESULT IN REDUCED REVENUES.
       18




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IF WE
    FAIL TO MAINTAIN REGULATORY APPROVALS AND CLEARANCES, OR ARE
    UNABLE TO OBTAIN, OR EXPERIENCE SIGNIFICANT DELAYS IN OBTAINING,
    FDA CLEARANCES OR APPROVALS FOR OUR FUTURE PRODUCTS OR PRODUCT
    ENHANCEMENTS, OUR ABILITY TO COMMERCIALLY DISTRIBUTE AND MARKET
    THESE PRODUCTS COULD SUFFER. THERE IS NO GUARANTEE THAT THE FDA
    WILL GRANT 510(K) CLEARANCE OR PMA APPROVAL OF OUR FUTURE
    PRODUCTS AND FAILURE TO OBTAIN NECESSARY CLEARANCES OR APPROVALS
    FOR OUR FUTURE PRODUCTS WOULD ADVERSELY AFFECT OUR ABILITY TO
    GROW OUR BUSINESS.
           19




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and/or
      EVEN
    IF OUR PRODUCTS ARE APPROVED OR CLEARED BY REGULATORY
    AUTHORITIES, IF WE FAIL TO COMPLY WITH ONGOING FDA OR OTHER
    FOREIGN REGULATORY AUTHORITY REQUIREMENTS, OR IF WE EXPERIENCE
    UNANTICIPATED PROBLEMS WITH OUR PRODUCTS, THESE PRODUCTS
    COULD BE SUBJECT TO RESTRICTIONS OR WITHDRAWAL FROM THE
    MARKET.
   20




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MODIFICATIONS
    TO OUR PRODUCTS MAY REQUIRE NEW REGULATORY CLEARANCES OR
    APPROVALS OR MAY REQUIRE US TO RECALL OR CEASE MARKETING OUR
    PRODUCTS UNTIL CLEARANCES OR APPROVALS ARE
    OBTAINED.
      FEDERAL
    REGULATORY REFORMS MAY ADVERSELY AFFECT OUR ABILITY TO SELL OUR
    PRODUCTS PROFITABLY.
   21




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OUR
    INTERNATIONAL SALES ARE SUBJECT TO CURRENCY, MARKET AND
    REGULATORY RISKS THAT ARE BEYOND OUR CONTROL.
      OUR
    FAILURE TO COMPLY WITH ANY APPLICABLE ENVIRONMENTAL, HEALTH,
    SAFETY AND RELATED GOVERNMENT REGULATIONS MAY AFFECT OUR ABILITY
    TO DEVELOP, PRODUCE OR MARKET OUR POTENTIAL PRODUCTS AND MAY
    ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
   22




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WE MAY
    BE HELD LIABLE FOR ANY INACCURACIES ASSOCIATED WITH NUCLEIC ACID
    TESTS PERFORMED USING OUR PRODUCTS, WHICH MAY REQUIRE US TO
    DEFEND OURSELVES IN COSTLY LITIGATION.
    WE
    HAVE VARIOUS MECHANISMS IN PLACE THAT A STOCKHOLDER MAY NOT
    CONSIDER FAVORABLE AND WHICH MAY DISCOURAGE POTENTIAL
    ACQUISITIONS.
    
    authorizing our Board of Directors to issue preferred stock and
    to determine the price, privileges and other terms of these
    shares without any further approval of our stockholders, which
    could increase the number of outstanding shares or thwart an
    unsolicited takeover attempt;
    a shareholders rights plan under which rights holders (except
    the acquirer) would be entitled to acquire Third Wave common
    stock at a significant discount upon the occurrence of a person
    or group acquiring 15 percent or more of Third Waves
    common stock and which discourages acquisitions of
    15 percent or more of Third Waves common stock
    without negotiation with the Board of Directors;
    establishing a classified Board of Directors with staggered,
    three-year terms, which may lengthen the time required to gain
    control of our Board of Directors;
    requiring super-majority voting to effect certain amendments to
    our certificate of incorporation and bylaws;
    limiting who may call special meetings of stockholders;
    prohibiting stockholder action by written consent, which
    requires all actions to be taken at a meeting of stockholders;
    establishing advance notice requirements for nominations of
    candidates for election to the Board of Directors or for
    proposing matters that can be acted upon by stockholders at
    stockholder meetings; and
    payments due to executive officers and other employees under
    executive compensation plans, long-term incentive plans and
    employment and similar agreements that could be triggered by
    certain change of control events.    OUR
    PRINCIPAL STOCKHOLDERS WILL HAVE SUBSTANTIAL CONTROL OVER OUR
    AFFAIRS.
   23




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RISKS
    RELATED TO THE BIOTECHNOLOGY INDUSTRY
  PUBLIC
    OPINION REGARDING ETHICAL ISSUES SURROUNDING THE USE OF GENETIC
    INFORMATION MAY ADVERSELY AFFECT DEMAND FOR OUR
    PRODUCTS.
    GOVERNMENT
    REGULATION OF GENETIC RESEARCH OR TESTING MAY ADVERSELY
    AFFECT THE DEMAND FOR OUR PRODUCTS AND IMPAIR OUR BUSINESS AND
    OPERATIONS.
    HEALTH
    CARE COST CONTAINMENT INITIATIVES COULD LIMIT THE ADOPTION OF
    GENETIC TESTING AS A CLINICAL TOOL, WHICH WOULD HARM OUR
    REVENUES AND PROSPECTS.
    REIMBURSEMENT
    FOR USE OF OUR PRODUCTS
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS.   24




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ITEM 2.
    PROPERTIES    Approx.SquareType of Facility

Footage


Lease ExpirationHeadquarters, research and development, manufacturing, selling,
    marketing, and administration


68,000



September 2014     ITEM 3.
    LEGAL
    PROCEEDINGS      ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   25




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    Fiscal Year Ended December 31, 2007

High


LowFirst Quarter

$
6.00


$
4.64Second Quarter

$
6.13


$
4.99Third Quarter

$
9.10


$
5.71Fourth Quarter

$
9.85


$
7.74   Fiscal Year Ended December 31, 2006

High


LowFirst Quarter

$
3.44


$
2.76Second Quarter

$
3.33


$
2.60Third Quarter

$
4.99


$
2.26Fourth Quarter

$
5.33


$
3.82      26




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STOCKHOLDER
    RETURN PERFORMANCE GRAPH
    
  12/31/02


12/31/03


12/31/04


12/31/05


12/31/06


12/31/07TWTI



100.00




169.14




319.70




110.78




178.81




358.74NASDAQ



100.00




150.01




162.89




165.13




180.85




198.60Peer Group 1



100.00




200.52




232.18




257.58




292.97




425.11Peer Group 2



100.00




258.87




264.54




248.43




270.64




363.42        27




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
  For Year Ended December 31,2007


2006


2005


2004


2003(In thousands, except for per share amounts)STATEMENT OF OPERATIONS DATA:Revenues

$
31,121


$
28,027


$
23,906


$
46,493


$
36,320Operating expenses:Cost of goods sold


8,447



8,434



7,104



12,492



12,840Research and development


22,826



12,436



8,389



11,637



12,035Selling and marketing


11,486



11,082



12,772



10,803



8,859General and administrative


14,320



14,782



11,788



12,913



9,642Litigation


5,277



1,610



6,887



349



721Restructuring and other charges






(180
)






(98
)


Impairment of equipment










203



795



Total operating expenses


62,356



48,164



47,143



48,891



44,097Loss from operations


(31,235
)


(20,137
)


(23,237
)


(2,398
)


(7,777
)Other income (expense), net


13,786



1,036



891



513



(339
)Loss before income taxes and minority interest


(17,449
)


(19,101
)


(22,346
)


(1,885
)


(8,116
)Minority interest


(600
)


(214
)










Provision for income taxes














57



Net loss

$
(16,849
)

$
(18,887
)

$
(22,346
)

$
(1,942
)

$
(8,116
)Basic and diluted net loss per share

$
(0.39
)

$
(0.45
)

$
(0.54
)

$
(0.05
)

$
(0.20
)Shares used in computing basic and diluted net loss per share


42,758



41,512



41,125



40,463



39,749   December 31,2007


2006


2005


2004


2003(In thousands)BALANCE SHEET DATA:Cash, cash equivalents, and short term investments

$
35,739


$
44,199


$
38,717


$
66,690


$
57,816Working capital


37,663



39,931



32,997



52,901



42,655Total assets


69,001



63,131



57,246



86,969



79,694Long-term obligations, net of current portion


15,864



15,282



831



487



13Accumulated deficit


(194,587
)


(177,738
)


(158,120
)


(135,774
)


(133,832
)Total shareholders equity


29,578



30,673



40,074



62,735



59,288   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K.
 28




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OVERVIEW
            ®
    CRITICAL
    ACCOUNTING POLICIES
   29




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REVENUE
    RECOGNITION
  No. 00-21
      LONG-LIVED
    ASSETS  IMPAIRMENT
    Goodwill and Other
    Intangible Assets
  INVENTORIES 
    SLOW MOVING AND OBSOLESCENCE
   30




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STOCK-BASED
    COMPENSATION EXPENSE
        RESULTS
    OF OPERATIONS
  Years
    Ended December 31, 2007 and 2006
  Revenues.
        Significant Customers.
  Cost of Goods Sold.
 31




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Research and Development Expenses.
  Selling and Marketing Expenses.
  General and Administrative Expenses.
  Litigation Expense.
  Restructuring.
  Interest Income.
  Interest Expense.
  Other Income (Expense).
  Minority Interest.
 32




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Years
    Ended December 31, 2006 and 2005
  Revenues.
        Significant Customers.
    Cost of Goods Sold.
  Research and Development Expenses.
  Selling and Marketing Expenses.
  General and Administrative Expenses.
  Litigation Expense.
 33




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Impairment Loss.
  Restructuring.
  Interest Income.
  Interest Expense.
  Other Income (Expense).
  Minority Interest.
  LIQUIDITY
    AND CAPITAL RESOURCES
             34




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35




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
    our progress with our research and development programs;
    the needs we may have to pursue FDA clearances or approvals of
    our products;
    our level of success in selling our products and technologies;
    our ability to establish and maintain successful collaborations;
    the costs we incur in securing intellectual property rights,
    whether through patents, licenses or otherwise;
    the costs we incur in enforcing and defending our patent claims
    and other intellectual property rights;
    the timing of additional capital expenditures;
    the need to respond to competitive pressures; and
    the possible acquisition of complementary products, businesses
    or technologies.  CONTRACTUAL
    OBLIGATIONS
    Less Than


Years


Years


OverTotal


1 Year


2-3


4-5


5 YearsCONTRACTUAL OBLIGATIONSNon-cancelable operating lease obligation

$
6,975


$
1,021


$
2,162


$
2,079


$
1,713Capital lease obligations


106



57



49







License arrangements


2,185



835



1,350







Long-term debt


20,000











20,000



Total obligations

$
29,266


$
1,913


$
3,561


$
22,079


$
1,713     OFF-BALANCE
    SHEET ARRANGEMENTS
   36




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##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     37




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  CONSOLIDATED
    FINANCIAL STATEMENTS
  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   Third Wave Technologies, Inc.
  Internal Control  Integrated Framework
        Internal Control  Integrated
    Framework
        38




---



##### Table of Contents



Internal Control  Integrated
    Framework )
      39




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Consolidated
    Balance Sheets
  December 31,


December 31,2007


2006ASSETSCurrent assets:Cash and cash equivalents

$
35,353,786


$
42,428,841Short-term investments


385,000



1,770,000Accounts receivables, net of allowance for doubtful accounts of
    $250,000 and $200,000 at December 31, 2007 and 2006,
    respectively


6,350,664



4,756,497Inventories


5,009,062



3,513,909Prepaid expenses and other


517,386



463,139Total current assets


47,615,898



52,932,386Equipment and leasehold improvements:Machinery and equipment


16,901,703



16,623,560Leasehold improvements


3,249,877



2,362,67620,151,580



18,986,236Less accumulated depreciation and amortization


15,238,014



14,763,9324,913,566



4,222,304Other intangible assets, net of accumulated amortization


898,276



2,135,884Goodwill


489,873



489,873Capitalized license fees, net of accumulated amortization


2,875,015



2,624,580Other assets


12,208,620



725,636Total assets

$
69,001,248


$
63,130,663LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
5,895,744


$
7,095,860Accrued payroll and related liabilities


2,691,747



3,856,999Other accrued liabilities


1,316,248



1,446,500Deferred revenue






109,052Capital lease obligations due within one year


48,706



124,220Long-term debt due within one year






368,269Total current liabilities


9,952,445



13,000,900Long-term debt


15,819,353



15,182,478Deferred revenue  long-term






36,330Capital lease obligations  long-term


44,793



99,446Other liabilities


13,379,873



3,672,959Minority interest in subsidiary


226,289



465,134Shareholders equity:Participating preferred stock, Series A, $.001 par
    value, 10,000,000 shares authorized, no shares issued and
    outstanding






Common stock, $.001 par value, 100,000,000 shares
    authorized, 43,942,857 share issued, 43,724,857 shares
    outstanding at December 31, 2007 and 42,135,713 shares
    issued and 41,917,713 shares outstanding at
    December 31, 2006


43,943



42,136Additional paid-in capital


224,718,344



209,355,204Unearned stock compensation






(6,354
)Treasury stock  at cost


(877,159
)


(877,159
)Foreign currency translation adjustment


280,485



(102,186
)Accumulated deficit


(194,587,118
)


(177,738,225
)Total shareholders equity


29,578,495



30,673,416Total liabilities and shareholders equity

$
69,001,248


$
63,130,663    40




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Consolidated
    Statements of Operations
  Year Ended December 31,2007


2006


2005Revenues:Clinical product sales

$
26,250,487


$
20,926,092


$
15,665,519Research product sales


4,606,741



6,763,332



7,505,286License and royalty revenue


263,553



154,569



362,372Grant revenue






182,876



372,483Total revenues


31,120,781



28,026,869



23,905,660Operating expenses:Cost of goods sold (including amortization of intangible assets
    of $1,237,608, $1,513,147 and $1,504,752 in 2007, 2006 and 2005,
    respectively)


8,447,059



8,433,556



7,103,834Research and development


22,825,408



12,435,672



8,389,316Selling and marketing


11,486,164



11,082,427



12,772,439General and administrative


14,319,775



14,782,067



11,787,976Litigation


5,277,108



1,610,495



6,886,928Impairment of equipment










202,707Restructuring and other charges






(180,000
)


Total operating expenses


62,355,514



48,164,217



47,143,200Loss from operations


(31,234,733
)


(20,137,348
)


(23,237,540
)Other income (expense):Interest income


2,008,439



1,500,196



1,714,346Interest expense


(1,323,269
)


(239,516
)


(457,004
)Other


13,100,974



(224,568
)


(365,516
)Total other income (expense)


13,786,144



1,036,112



891,826Loss before minority interest

$
(17,448,589
)

$
(19,101,236
)

$
(22,345,714
)Minority interest in subsidiary


(599,696
)


(213,763
)


Net loss

$
(16,848,893
)

$
(18,887,473
)

$
(22,345,714
)Net loss per share  basic and diluted

$
(0.39
)

$
(0.45
)

$
(0.54
)Weighted average shares outstanding  basic and diluted


42,758,000



41,512,000



41,125,000    41




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Consolidated
    Statement of Shareholders Equity and Comprehensive Income
    (Loss)
  Common StockAdditional








ForeignPaid in


Unearned Stock





Currency


AccumulatedPar


Capital


Compensation


Treasury Stock


Translation


Deficit


TotalBalance at December 31, 2004


41,103



198,990,162



(554,293
)






31,949



(135,774,024
)


62,734,897Common stock issued for stock options and stock purchase
    plan  358,613 shares


358



915,403



















915,761Unearned stock compensation






(808,378
)


808,378















Amortization of unearned stock compensation










(368,977
)














(368,977
)Common stock repurchased for treasury 
    218,000 shares














(877,159
)










(877,159
)Net loss






















(22,345,714
)


(22,345,714
)Foreign currency translation adjustment


















15,493







15,493Comprehensive loss


























(22,330,221
)Balance at December 31, 2005


41,461



199,097,187



(114,892
)


(877,159
)


47,442



(158,119,738
)


40,074,301Common stock issued for stock options and stock purchase
    plan  674,335 shares


675



1,630,263



















1,630,938Equity investment in subsidiary






4,389,918



















4,389,918Stock-based compensation






3,378,373



















3,378,373Unearned stock compensation






128,449



(128,449
)














Amortization of unearned stock compensation










236,987















236,987Adjustment of prior year stock-based compensation expense (see
    Note 2)






731,014















(731,014
)


Net loss






















(18,887,473
)


(18,887,473
)Foreign currency translation adjustment


















(149,628
)






(149,628
)Comprehensive loss


























(19,037,101
)Balance at December 31, 2006

$
42,136


$
209,355,204


$
(6,354
)

$
(877,159
)

$
(102,186
)

$
(177,738,225
)

$
30,673,416Common stock issued for stock options and stock purchase
    plan  1,816,818 shares


1,817



5,742,670



















5,744,487Equity investment in subsidiary






5,049,408



















5,049,408Stock-based compensation






4,589,607



















4,589,607Unearned stock compensation






34,937



(34,937
)














Amortization of unearned stock compensation










41,291















41,291Common stock repurchased  9,673 shares


(10
)


(53,482
)


















(53,492
)Net loss






















(16,848,893
)


(16,848,893
)Foreign currency translation adjustment


















382,671







382,671Comprehensive loss


























(16,466,222
)Balance at December 31, 2007

$
43,943


$
224,718,344


$



$
(877,159
)

$
280,485


$
(194,587,118
)

$
29,578,495    42




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Consolidated
    Statements of Cash Flows
  Year Ended December 31,2007


2006


2005OPERATING ACTIVITIES:Net loss

$
(16,848,893
)

$
(18,887,473
)

$
(22,345,714
)Adjustments to reconcile net loss to net cash used in operating
    activities:Minority interest in net loss of subsidiary


(599,696
)


(213,763
)


Depreciation and amortization


1,740,157



1,657,678



1,705,252Amortization of other intangible assets


1,237,608



1,513,147



1,504,752Amortization of capitalized license fees


1,100,265



1,244,804



398,132Noncash stock compensation


4,630,898



3,615,359



(368,977
)Interest accretion related to convertible note payable


908,119



29,356



Impairment charge and loss on disposal of equipment


165,019



28,562



208,681Changes in operating assets and liabilities:Accounts receivable


(1,658,863
)


(1,182,665
)


1,937,853Inventories


(1,492,578
)


(1,269,026
)


(1,011,791
)Prepaid expenses and other assets


(919,414
)


(823,645
)


131,298Accounts payable


(1,022,436
)


13,560



(10,029
)Accrued expenses and other liabilities


(1,222,021
)


192,687



195,852Deferred revenue


(145,382
)


(121,627
)


(117,085
)Net cash used in operating activities


(14,127,217
)


(14,203,046
)


(17,771,776
)INVESTING ACTIVITIES:Purchases of equipment and leasehold improvements


(2,586,962
)


(1,136,122
)


(404,934
)Proceeds on sale of equipment


3,207







197,683Purchases of licensed technology


(1,330,617
)


(890,323
)


(200,000
)Purchases of short-term investments


(960,000
)


(1,770,000
)


(11,835,000
)Sales and maturities of short-term investments


2,345,000



11,035,000



11,870,000Change in restricted cash balance






805,184



(805,184
)Net cash provided by (used in) investing activities


(2,529,372
)


8,043,739



(1,177,435
)FINANCING ACTIVITIES:Proceeds from long-term debt






14,881,878



800,000Payments on long-term debt


(639,513
)


(378,602
)


(9,731,081
)Payments of debt issue costs


(1,125,000
)






Payments on capital lease obligations


(130,167
)


(141,610
)


(96,587
)Proceeds from issuance of common stock, net


5,744,487



1,630,938



915,761Proceeds from minority equity investment in subsidiary


5,259,058



5,093,973



Repurchase of common stock


(53,492
)






(877,159
)Net cash provided by (used in) financing activities


9,055,373



21,086,577



(8,989,066
)Effect of exchange rate changes on cash


526,161



(180,133
)


Net increase (decrease) in cash and cash equivalents


(7,075,055
)


14,747,137



(27,938,277
)Cash and cash equivalents at beginning of period


42,428,841



27,681,704



55,619,981Cash and cash equivalents at end of period

$
35,353,786


$
42,428,841


$
27,681,704Supplemental disclosure of cash flows information 
    Cash paid for interest

$
127,968


$
202,599


$
468,520Supplemental disclosure of cash flows information 
    Income taxes paid

$



$



$
52,754    43




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to Consolidated Financial Statements
 December 31, 2007
  1.
    NATURE OF
    OPERATIONS AND PRINCIPLES OF CONSOLIDATION  PRINCIPLES
    OF CONSOLIDATION
    NATURE
    OF OPERATIONS
      2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES    CASH
    EQUIVALENTS, SHORT-TERM INVESTMENTS, AND RESTRICTED
    CASH
          
    During the years ended December 31, 2006 and 2005, the
    Company entered into capital lease obligations of $58,659 and
    $184,452, respectively.
    During the year ended December 31, 2005 the Company entered
    into a license agreement in which the Company will pay
    $2,000,000 over time through 2010. The estimated present value
    of the license obtained was $1,772,172. 44




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   
    During the year ended December 31, 2006, the Company
    entered into a license agreement under which the Company will
    pay 1,000,000 Euros over two years. The estimated present value
    of the license was $1,122,338.
    During the year ended December 31, 2007, the Company
    entered into a license agreement under which the Company will
    pay $1,250,000 over three years. The estimated present value of
    the license was $1,150,700.
    During the year ended December 31, 2007, the Company issued
    79,441 shares of common stock as partial payment of amounts
    earned by employees under the 2006 incentive plan.
    During the year ended December 31, 2007, the Company issued
    1,815,000 million stock warrants as consideration for a
    five-year $25 million credit facility. The fair value of
    the stock warrants on the date of issuance was $9,238,350 which
    is recorded in Other Assets on the consolidated balance sheet as
    a debt issuance cost and is being amortized over the term of the
    credit facility.  INVENTORIES
  first-in,
  December 312007


2006Raw materials

$
2,328,313


$
2,283,852Finished goods and work in process


3,296,749



1,885,057Reserve for excess and obsolete inventory


(616,000
)


(655,000
)Total inventories

$
5,009,062


$
3,513,909   FOREIGN
    CURRENCY TRANSLATION
    EQUIPMENT
    AND LEASEHOLD IMPROVEMENTS
    PATENTS
    GOODWILL
    AND OTHER INTANGIBLE ASSETS
  Goodwill and Other Intangible Assets,
 45




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        December 31, 2007


December 31, 2006Carrying


Accumulated


Carrying


AccumulatedAmount


Amortization


Amount


AmortizationCosts of settling patent litigation

$
10,533,248


$
10,533,248


$
10,533,248


$
9,396,380Technology license


915,828



99,214



915,828



7,632Trademark


91,583



9,921



91,583



763$
11,540,659


$
10,642,383


$
11,540,659


$
9,404,775     2008

$
100,7402009


100,7402010


100,7402011


100,7402012


100,740Thereafter


394,576   IMPAIRMENT
    OF LONG-LIVED ASSETS
    CAPITALIZED
    LICENSE FEES
    DERIVATIVE
    INSTRUMENTS AND HEDGING ACTIVITIES
   46




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    REVENUE
    RECOGNITION
  No. 00-21 Revenue Arrangements with Multiple Deliverables,
      RESEARCH
    AND DEVELOPMENT
    SHIPPING
    AND HANDLING COSTS
    INCOME
    TAXES
    STOCK-BASED
    COMPENSATION
  Accounting for Stock Issued to
    Employees,
 47




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Accounting for Stock-Based
    Compensation No. 96-18, Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services,
  Share-Based Payment Statement of Cash Flows
    Year Ended December 312007


2006


2005Cost of goods sold

$
109,344


$
133,461


$
24,251Research and development


747,169



645,859



(501,754
)Selling and marketing


618,549



778,355



(5,256
)General and administrative


3,155,836



2,057,684



113,782$
4,630,898


$
3,615,359


$
(368,977
)    48




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007


2006


2005Expected term (years)


5



5



5Risk-free interest rate


4.4
%


4.8
%


4.3
%Expected volatility


64
%


74
%


81
%Expected dividend yield


0
%


0
%


0
%Forfeiture rate


25
%


25
%


0
%       2005Net loss:As reported

$
(22,345,714
)Add: Stock-based compensation, as recognized


(368,977
)Add: Stock-based compensation expense related to stock options
    determined under SFAS No. 123


(10,050,950
)Add: Stock-based compensation related to the employee stock
    purchase plan under SFAS No. 123


(207,989
)SFAS No. 123 Pro forma

$
(32,973,630
)Net loss per share:As reported, basic and diluted

$
(0.54
)SFAS No. 123 pro forma, basic and diluted

$
(0.80
)   Review of
    Stock Option Grants and Procedures
     49




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      FAIR
    VALUE OF FINANCIAL INSTRUMENTS
    USE OF
    ESTIMATES
    NET
    LOSS PER SHARE
      Year Ended December 312007


2006


2005Net loss

$
(16,848,893
)

$
(18,887,473
)

$
(22,345,714
)Weighted-average shares of common stock outstanding 
    basic and diluted


42,758,000



41,512,000



41,125,000Basic and diluted net loss per share

$
(0.39
)

$
(0.45
)

$
(0.54
)Weighted-average shares from options that could potentially
    dilute basic earnings per share in the future that are not
    included in the computation of diluted loss per share as their
    impact is antidilutive (computed under the treasury stock method)


2,424,974



777,000



1,591,000   NEW
    ACCOUNTING PRONOUNCEMENTS
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115
 50




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Fair Value Measurements (
  No. 07-1, Accounting for Collaborative Arrangements (EITF 07-1). EITF 07-1 EITF 07-1 EITF 07-1
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements, an amendment of ARB No. 51
  3.
    CHANGE IN
    ACCOUNTING ESTIMATE    4.
    LONG-TERM
    DEBT    December 312007


2006Notes payable

$
15,819,353


$
15,550,747Less current portion






368,269$
15,819,353


$
15,182,478  51




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2008

$
2009


2010


2011


15,819,353         EITF 00-19. Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock
 52




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  5.
    SHAREHOLDERS
    EQUITY    MINORITY
    INTEREST IN SUBSIDIARY
        STOCK
    PURCHASE PLAN
    STOCK
    OPTION PLANS
   53




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Shares available for grant at December 31, 2004


2,013,365Options granted


(2,521,790
)Options forfeited


622,964Increase in options available for grant


1,800,000Shares available for grant at December 31, 2005


1,914,539Options granted


(930,250
)RSUs granted


(112,530
)Options forfeited


1,694,353RSUs forfeited


3,451Shares available for grant at December 31, 2006


2,569,563Options granted


(79,829
)RSUs granted


(575,033
)Options forfeited


139,888RSUs forfeited


16,745Shares available for grant at December 31, 2007


2,071,334     WeightedAverage


AggregateNumber of


Exercise


IntrinsicShares


Price


ValueOutstanding at December 31, 2004


7,446,523


$
4.55Granted


2,521,790


$
4.20Exercised


(244,051
)

$
2.22Forfeited


(622,964
)

$
7.20Outstanding at December 31, 2005


9,101,298


$
4.34Granted


930,250


$
3.02Exercised


(549,588
)

$
2.39Forfeited


(1,694,353
)

$
5.24Outstanding at December 31, 2006


7,787,607


$
4.12Granted


79,829


$
6.88Exercised


(1,521,207
)

$
3.13Forfeited


(139,888
)

$
4.82Outstanding at December 31, 2007


6,206,341


$
4.41


$
32,566,156Options Exercisable at December 31, 2007


4,987,614


$
4.59


$
25,237,846  54




---



##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Number ofShares








Shares


WtdOutstanding at


Wtd Average


Remaining


Exercisable at


AverageDecember 31,


Exercise


Contractual


December 31,


Exercise2007


Price


Life


2007


PriceOptions granted between $1.11 and $2.20


519,904


$
1.99



4.5



519,904


$
1.99Options granted between $2.21 and $3.31


1,704,488


$
2.85



7.0



1,028,048


$
2.84Options granted between $3.32 and $4.42


2,078,236


$
3.99



6.0



1,732,742


$
3.97Options granted between $4.43 and $5.53


422,413


$
4.65



6.5



299,120


$
4.64Options granted between $5.54 and $6.64


566,050


$
6.33



4.0



552,550


$
6.35Options granted between $6.65 and $7.74


245,200


$
7.02



6.8



185,200


$
6.90Options granted between $7.75 and $8.85


642,400


$
8.75



2.9



642,400


$
8.75Options granted between $8.86 and $9.96


7,200


$
9.58



2.5



7,200


$
9.58Options granted between $9.97 and $11.06


20,450


$
10.81



3.4



20,450


$
10.81     No. 96-18,
  Restricted
    Stock Units
    WeightedAverageNumber of


FairShares


ValueNonvested shares of restricted stock units at December 31,
    2006


109,079


$
2.84Granted


575,033


$
4.81Vested


(111,508
)

$
3.07Forfeited


(16,745
)

$
2.72Nonvested shares of restricted stock units at December 31,
    2007


555,859


$
4.82    55




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##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    6.
    INCOME
    TAXES        December 312007


2006Deferred tax assets:Patent expense

$
2,772,000


$
2,395,000Stock compensation expense


1,610,000



267,000Deferred revenue






58,000Inventory obsolescence


251,000



262,000Accrued liabilities


1,273,000



1,456,000Equipment and leasehold improvements


311,000



76,000Other


334,000



274,000AMT credit carryforward


39,000



39,000Net operating loss carryforwards


62,289,000



58,433,000Total deferred tax assets


68,879,000



63,260,000Valuation allowance


(68,879,000
)


(62,809,000
)Net deferred tax assets






451,000Deferred tax liabilities:Intangibles





$
(451,000
)Deferred tax liabilities






(451,000
)Net deferred tax assets/(liabilities)

$



$
  56




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##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   2007


2006


2005Federal statutory rate


(34.0
)%


(34.0
)%


(34.0
)%State taxes


(5.3
)%


(5.0
)%


(5.9
)%Meals and entertainment


0.3
%


0.2
%


0.2
%Stock-based compensation


(2.0
)%


5.4
%


Other permanent differences


0.3
%


(0.3
)%


0.0
%Valuation allowance


40.7
%


33.7
%


39.7
%0.0
%


0.0
%


0.0
%     Accounting for Uncertainty in
    Income Taxes Accounting for Income Taxes
      7.
    LEASE
    OBLIGATIONS     57




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##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Capital


OperatingLeases


Leases2008


57,000


$
1,021,0002009


37,000



1,061,0002010


12,000



1,100,0002011






1,100,0002012






979,000Thereafter






1,713,000Total minimum lease obligations


106,000



6,974,000Less amounts representing interest


12,000Present value of minimum lease payments


94,000Less current portion of long-term lease obligations


49,00045,000     8.
    LONG-TERM
    ASSETS:    December 31, 2007


December 31, 2006Debt issuance costs

$
10,876,142


$
796,526Rent


640,019



(463,609
)Equipment receivables


406,091



300,951Equipment leased to customers


286,368



86,784Other






4,984$
12,208,620


$
725,636  58




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##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    LICENSE
    AGREEMENTS          2008

$
450,0002009


450,0002010


225,000Total payments


1,125,000Less amount representing interest


76,740Present value of payments

$
1,048,260      59




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##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2008

$
385,4172009


385,4172010


289,062Total payments


1,059,896Less amount representing interest


83,884Present value of payments

$
976,012   and/or
  10.
    COLLABORATIVE
    AGREEMENTS    tm ® tm
  11.
    401(k)
    PLAN    12.
    LONG-TERM
    INCENTIVE PLANS     60




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##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  13.
    SETTLEMENT      14.
    LONG-TERM
    LIABILITIES    December 31,


December 31,2007


2006License payments

$
1,283,439


$
1,048,260Long-term incentive plan


2,291,332



1,885,989Stock warrants (see note 4)


9,238,350



Restructuring


366,752



505,681Other


200,000



233,029$
13,379,873


$
3,672,959   15.
    PAYROLL
    AND RELATED LIABILITIES    December 31,


December 31,2007


2006Bonus Accrual

$
1,878,020


$
2,589,000Paid Time Off


390,000



591,945Other


423,727



676,054$
2,691,747


$
3,856,999   16.
    LITIGATION   61




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##### Table of Contents



Third
    Wave Technologies, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      17.
    SEGMENT
    DISCLOSURE    2007


2006


2005United States

$
27,392,412


$
23,064,642


$
17,027,952Japan


1,998,238



3,814,957



5,107,455Other


1,466,578



809,825



1,035,398$
30,857,228


$
27,689,424


$
23,170,805   18.
    RECLASSIFICATION    19.
    QUARTERLY
    FINANCIAL DATA (UNAUDITED)    Quarter EndedMarch 31


June 30


September 30


December 312007:Net revenues

$
6,713


$
7,361


$
8,158


$
8,889Gross margin


4,696



5,420



6,016



6,541Net income (loss)


4,766



(7,248
)


(6,430
)


(7,937
)Basic and diluted net loss per share

$
0.11


$
(0.17
)

$
(0.15
)

$
(0.18
)2006:Net revenues

$
7,875


$
6,759


$
6,601


$
6,792Gross margin


5,712



4,861



4,364



4,656Net loss


(4,383
)


(4,727
)


(5,153
)


(4,624
)Basic and diluted net loss per share

$
(0.11
)

$
(0.11
)

$
(0.12
)

$
(0.11
)  62




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
    AND FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  EVALUATION
    OF DISCLOSURE CONTROLS AND PROCEDURES
  Rule 13a-15(b) Rules 13a-15(e)
  EVALUATION
    OF INTERNAL CONTROL OVER FINANCIAL REPORTING
          ITEM 9B.
    OTHER
    INFORMATION   63




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##### Table of Contents



PART III   PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENTS AND SCHEDULES    Financial Statements.
  Financial Statement Schedules.
  Schedule II  Valuation and Qualifying
    Accounts.
  Exhibits.
 64




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##### Table of Contents



SIGNATURES      By:
    /s/  Kevin
    T. Conroy   Chief Executive Officer
  POWER OF
    ATTORNEY
  Form 10-K Form 10-K.
    Signature

Title

Date/s/  David
    A. ThompsonDavid
    A. Thompson

Chairman of the Board and Director

March 4, 2008/s/  Kevin
    T. ConroyKevin
    T. Conroy

President and Chief Executive Officer (Principal Executive
    Officer)

March 7, 2008/s/  Maneesh
    K. AroraManeesh
    K. Arora

Chief Financial Officer 
    (Principal Financial Officer)

March 7, 2008/s/  James
    ConnellyJames
    Connelly

Director

March 3, 2008/s/  Gordon
    F. BrunnerGordon
    F. Brunner

Director

March 2, 2008/s/  Lawrence
    MurphyLawrence
    Murphy

Director

March 3, 2008/s/  Katherine
    NapierKatherine
    Napier

Director

March 5, 2008/s/  Lionel
    SterlingLionel
    Sterling

Director

March 4, 2008  65




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.


Description

Incorporated by Reference to3
.1

Amended and Restated Certificate of Incorporation of the
    Registrant, dated as of August 16, 2000

Exhibit 3.1(b) to the Registrants Registration Statement
    on Form S-1 filed on July 31, 20003
.2

Amended and Restated Bylaws of the Registrant, dated as of
    April 11, 2006

Exhibit 3.1 to the Registrants Current Report on Form 8-K
    filed April 17, 20064
.1

Rights Agreement between the Registrant and Computershare
    Investor Services (fka EquiServe Trust Company N.A.), dated
    as of October 24, 2001

Exhibit 4.9 to the Registrants Registration Statement on
    Form 8-A  filed on November 30, 20014
.2

Amendment No. 1 to the Rights Agreement between the
    Registrant and Computershare Investor Services (fka EquiServe
    Trust Company N.A.) dated February 18, 2003

Exhibit 4.2 to the Registrants Registration Statement on
    Form 8-A/A filed on February 19, 200310
.1*

Incentive Stock Option Plan

Exhibit 10.1 to the Registrants Registration Statement on
    Form S-1 filed on July 31, 200010
.2*

1997 Incentive Stock Option Plan

Exhibit 10.2 to the Registrants Registration Statement on
    Form S-1 filed on July 31, 200010
.3*

1997 Nonqualified Stock Option Plan

Exhibit 10.3 to the Registrants Registration Statement on
    Form S-1 filed on July 31, 200010
.4*

1998 Incentive Stock Option Plan

Exhibit 10.4 to the Registrants Registration Statement on
    Form S-1 filed on July 31, 200010
.5*

1999 Incentive Stock Option Plan

Exhibit 10.5 to the Registrants Registration Statement on
    Form S-1 filed on July 31, 200010
.6*

1999 Nonqualified Stock Option Plan

Exhibit 10.6 to the Registrants Registration Statement on
    Form S-1 filed on July 31, 200010
.7*

2000 Stock Plan, as amended

Exhibit 4.1 to Registrants Registration Statement on Form
    S-8 filed on June 6, 200610
.8*

First Amendment To Third Wave Technologies Inc. 2000 Stock Plan

Exhibit 10.8 to the Registrants Annual Report on Form 10-K
    for the fiscal year ended December 31, 200610
.9*

2000 Employee Stock Purchase Plan

Exhibit 10.8 to the Registrants Registration Statement on
    Form S-1 filed on July 31, 200010
.10*

Form of Stock Option Agreement

Exhibit 4.2 to the Registrants Registration Statement on
    Form S-8, filed on June 6, 200610
.11*

Form of Restricted Stock Purchase Agreement

Exhibit 4.3 to the Registrants Registration Statement on
    Form S-8, filed on June 6, 200610
.12

Lease Agreement between Third Wave Technologies, Inc and
    University Research Park, Inc. dated July 13, 2007

Exhibit 10.3 to the Registrants Quarterly Report on Form
    10-Q for the quarter ended June 30, 200710
.13

Development and Commercialization Agreement, dated as of
    December 29, 2000, between the Registrant and BML,
    Inc.

Exhibit 10.26 to the Registrants Registration Statement on
    Form S-1/A filed on January 8, 200110
.14

License Agreement dated as of October 15, 2002 between
    Registrant and Monogram Biosciences (fka Aclara Biosciences,
    Inc.)

Exhibit 10.14 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200210
.15*

Third Wave Technologies, Inc. Amended Long Term Incentive Plan
    No. 2

Exhibit 10.19 to Registrants Annual Report on Form 10-K
    for the fiscal year ended December 31, 2005 66




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##### Table of Contents



ExhibitNo.


Description

Incorporated by Reference to10
.16*

Third Wave Technologies, Inc. Amended Long Term Incentive Plan
    No. 3

Exhibit 10.29 to Registrants Annual Report on Form 10-K
    for the fiscal year ended December 31, 200510
.17

Series A Preferred Stock and Warrant Purchase Agreement
    between Mitsubishi Corporation, CSK Institute for
    Sustainability, Ltd. and Third Wave Technologies Japan, K.K.
    dated March 31, 2006

Exhibit 10.3 to the Registrants Quarterly Report on Form
    10-Q for the fiscal year ended March 31, 200610
.18

Securities Purchase Agreement between Stark Onshore Master
    Holding LLC and Third Wave Technologies, Inc. dated
    December 18, 2006

Exhibit 10.1 to Registrants Current Report on Form 8-K
    filed December 19, 200610
.19*

Second Amended and Restated Employment Agreement between Kevin
    T. Conroy and Third Wave Technologies, Inc. dated March 12,
    2007

Exhibit 10.22 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200610
.20*

Amendment 1 to Second Amended and Restated Employment Agreement
    between Kevin T. Conroy and Third Wave Technologies, Inc. dated
    November 7, 200710
.21*

Amended and Restated Employment Agreement between Maneesh Arora
    and Third Wave Technologies, Inc. dated March 12, 2007

Exhibit 10.23 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200610
.22*

Amendment 1 to Amended and Restated Employment Agreement between
    Maneesh Arora and Third Wave Technologies, Inc. dated
    November 7, 200710
.23*

Employment Agreement between Cindy S. Ahn and Third Wave
    Technologies, Inc. dated March 12, 2007

Exhibit 10.24 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200610
.24*

Amended and Restated Employment agreement between Cindy S. Ahn
    and Third Wave Technologies, Inc. dated November 7, 200710
.25*

Employment Agreement between John Bellano and Third Wave
    Technologies, Inc. dated March 12, 2007

Exhibit 10.25 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200610
.26*

Amendment 1 to Employment Agreement between John Bellano and
    Third Wave Technologies, Inc. dated November 7, 200710
.27*

Employment Agreement between Jorge Garces and Third Wave
    Technologies, Inc. dated March 12, 2007

Exhibit 10.26 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200610
.28*

Amendment 1 to Employment Agreement between Jorge Garces and
    Third Wave Technologies, Inc. dated November 7, 200710
.29*

Employment Agreement between Greg Hamilton and Third Wave
    Technologies, Inc. dated March 12, 2007

Exhibit 10.27 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200610
.30*

Amendment 1 to Employment Agreement between Greg Hamilton and
    Third Wave Technologies, Inc. dated November 7, 2007 67




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##### Table of Contents



ExhibitNo.


Description

Incorporated by Reference to10
.31*

Employment Agreement between Ivan Trifunovich and Third Wave
    Technologies, Inc. dated November 7, 200710
.32*

Third Wave Technologies, Inc. 2007 Incentive Plan

Exhibit 10.29 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200610
.33*

Third Wave Technologies, Inc. Long Term Incentive Plan No. 4

Exhibit 10.30 to the Registrants Annual Report on Form
    10-K for the fiscal year ended December 31, 200610
.34

Series A Preferred Stock Purchase Agreement between Third
    Wave Japan, Inc. and Mitsubishi Corporation, CSK Institute for
    Sustainability, Ltd., BML, Inc., Daiichi Pure Chemicals Co.,
    Ltd., Toppan Printing Co., Ltd. and Shimadzu Corporation dated
    May 18, 2007

Exhibit 10.1 to the Registrants Quarterly Report on Form
    10-Q for the quarter ended June 30, 200710
.35

Investor Rights Agreement between Third Wave Technologies, Inc.,
    Wave Japan, Inc., Mitsubishi Corporation, CSK Institute
    Sustainability, Ltd., BML, Inc., Daiichi Pure Chemicals Co.,
    Toppan Printing Co., Ltd. and Shimadzu Corporation dated
    May 31, 2007

Exhibit 10.2 to the Registrants Quarterly Report on Form
    10-Q for the quarter ended June 30, 200710
.36

Facility Agreement, dated as of December 10, 2007, between
    Third Wave Technologies, Inc., Deerfield Private Design Fund,
    L.P. and Deerfield Private Design International, L.P.

Exhibit 10.1 to the Registrants Current Report on Form 8-K
    filed December 13, 200710
.37

Warrant to Purchase Common Stock of Third Wave Technologies,
    Inc. issued on December 10, 2007 to Deerfield Private
    Design Fund, L.P.

Exhibit 10.2 to the Registrants Current Report on Form 8-K
    filed December 13, 200710
.38

Warrant to Purchase Common Stock of Third Wave Technologies,
    Inc. issued on December 10, 2007 to Deerfield Private
    Design International, L.P.

Exhibit 10.3 to the Registrants Current Report on Form 8-K
    filed December 13, 200710
.39

Registration Rights Agreement, dated as of December 10,
    2007, between Third Wave Technologies, Inc., Deerfield Private
    Design Fund, L.P. and Deerfield Private Design International,
    L.P.

Exhibit 10.4 to the Registrants Current Report on Form 8-K
    filed December 13, 200710
.40

First Amendment to Convertible Senior Subordinated Zero-Coupon
    Promissory Note, dated as of December 10, 2007, between
    Third Wave Technologies, Inc. and Stark Onshore Master Holding
    LLC

Exhibit 10.5 to the Registrants Current Report on Form 8-K
    filed December 13, 200710
.41*

Third Wave Technologies, Inc. 2008 Incentive Plan10
.42*

Third Wave Technologies, Inc. Long Term Incentive Plan No. 521


List of Subsidiaries 68




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##### Table of Contents



ExhibitNo.


Description

Incorporated by Reference to23


Consent of Independent Registered Public Accounting
    Firm  Grant Thornton LLP24


Powers of Attorney (contained in the signature page hereto)31
.1

CEOs Certification Pursuant to Section 302 of the
    Sarbanes Oxley Act of 200231
.2

CFOs Certification pursuant to Section 302 of the
    Sarbanes Oxley Act of 200232
.1

CEOs Certification pursuant to 18 U.S.C.
    Section 1350, of Chapter 63 of Title 18 of the
    United States Code32
.2

CFOs Certification pursuant to 18 U.S.C Section 1350,
    of Chapter 63 of Title 18 of the United States Code     *
    
    Indicates a management contract or compensatory plan or
    arrangement 69




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##### Table of Contents



SCHEDULE II:
    VALUATION AND QUALIFYING ACCOUNTS
    YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005
  Balance at


AdditionsBeginning


Charged


(1)


Balance atDescription

of Year


to Expense


Deductions


End of Year(Dollars in thousands)Allowance for doubtful accounts receivable:2005

$
300


$
107


$
207


$
2002006

$
200


$
24


$
24


$
2002007

$
200


$
109


$
59


$
250Allowance for excess and obsolete inventory:2005

$
650


$
968


$
943


$
6752006

$
675


$
770


$
790


$
6552007

$
655


$
720


$
759


$
616     (1)
    
    Represents amounts written off or disposed, net of recoveries. 70