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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the period ended March 31, 2002

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from
         
          
       to     
            
         .

Commission file # 000-28229

CALIPER TECHNOLOGIES CORP.

(Exact name of registrant as specified in its charter)


|                                 |  |                                                  
|-------------------------------- |  | -------------------------------------------------
|Delaware(State of Incorporation) |  | 33-0675808(I.R.S. Employer Identification Number)

605 FAIRCHILD DRIVE
MOUNTAIN VIEW, CA 94043-2234(Address and zip code of principal executive offices)

Registrants telephone number, including area code: (650) 623-0700

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

COMMON SHARES OUTSTANDING ON APRIL 30, 2002: 24,285,496





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TABLE OF CONTENTS



|                              |                                                                                               |                                                      |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | PART I. FINANCIAL INFORMATION                                                                
|                              |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II  OTHER INFORMATION  
|                              | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                              | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                            
|                              | ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                      
|                              | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                              | ITEM 5. OTHER INFORMATION                                                                    
|                              | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                   
|EXHIBIT INDEX                



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CALIPER TECHNOLOGIES CORP.
TABLE OF CONTENTS

|           |  |  |  |         |  |                                                                                       |  |  |                                                                                                    |  |      |   | 
|---------- |  |  |  | ------- |  | ------------------------------------------------------------------------------------- |  |  | -------------------------------------------------------------------------------------------------- |  | ---- | - | 
|           |  |  |  |         |  |                                                                                       |  |  |                                                                                                    |  | Page
|           |  |  |  |         |  |                                                                                       |  |  |                                                                                                    |  |     
|PART I     |  |  |  |         |  | FINANCIAL INFORMATION                                                                 |  |  |                                                                                                    | 
|           |  |  |  | Item 1. |  | Financial Statements (unaudited)                                                      |  |  |                                                                                                    | 
|           |  |  |  |         |  |                                                                                       |  |  | Condensed Consolidated Balance Sheets as of March 31, 2002
and December 31, 2001                   |  |      | 2 | 
|           |  |  |  |         |  |                                                                                       |  |  | Condensed Consolidated Statements of Operations for the Three Months
Ended March 31, 2002 and 2001 |  |      | 3 | 
|           |  |  |  |         |  |                                                                                       |  |  | Condensed Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2002 and 2001 |  |      | 4 | 
|           |  |  |  |         |  |                                                                                       |  |  | Notes to Unaudited Condensed Consolidated Financial Statements                                     |  |      | 5 | 
|           |  |  |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations |  |  | 10                                                                                                 | 
|           |  |  |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                            |  |  | 18                                                                                                 | 
|PART II    |  |  |  |         |  | OTHER INFORMATION                                                                     |  |  |                                                                                                    | 
|           |  |  |  | Item 1. |  | Legal Proceedings                                                                     |  |  | 19                                                                                                 | 
|           |  |  |  | Item 2. |  | Changes in Securities and Use of Proceeds                                             |  |  | 19                                                                                                 | 
|           |  |  |  | Item 3. |  | Defaults upon Senior Securities                                                       |  |  | 19                                                                                                 | 
|           |  |  |  | Item 4. |  | Submission of Matters to a Vote of Security Holders                                   |  |  | 19                                                                                                 | 
|           |  |  |  | Item 5. |  | Other Information                                                                     |  |  | 20                                                                                                 | 
|           |  |  |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  |  | 20                                                                                                 | 
|SIGNATURES |  |  |  |         |  |                                                                                       |  |  | 21                                                                                                 | 





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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CALIPER TECHNOLOGIES CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)

|                                           |                                           |   |             |         |              |   |         |         |  
|------------------------------------------ | ----------------------------------------- | - | ----------- | ------- | ------------ | - | ------- | ------- | -
|                                           |                                           |   | March 31,   |         | December 31,
|                                           |                                           |   | 2002        |         | 2001        
|                                           |                                           |   |             |         |             
|                                           |                                           |   | (unaudited) |         |              |   |        
|Assets                                     |                                           |   |             |         |              |   |         |        
|Current assets:                            |                                           |   |             |         |              |   |         |        
|                                           | Cash and cash equivalents                 |   | $           | 23,026  |              |   | $       | 10,655  |  
|                                           | Marketable securities                     |   |             | 128,318 |              |   |         | 155,521 |  
|                                           | Accounts receivable                       |   |             | 2,314   |              |   |         | 1,130   |  
|                                           | Accounts receivable-related party         |   |             | 67      |              |   |         | 1,179   |  
|                                           | Inventories                               |   |             | 5,116   |              |   |         | 3,411   |  
|                                           | Prepaid expenses and other current assets |   |             | 3,727   |              |   |         | 2,311   |  
|                                           | Investment in Aclara common stock         |   |             | 3,006   |              |   |         | 4,563   |  
|                                           | Other receivable                          |   |             | 28,040  |              |   |         | 26,949  |  
|                                           |                                           |   |             |         |              |   |         |        
|Total current assets                       |                                           |   | 193,614     |         |              |   | 205,719 |        
|Security deposits                          |                                           |   | 3,200       |         |              |   | 3,200   |        
|Property and equipment, net                |                                           |   | 14,237      |         |              |   | 12,581  |        
|Notes receivable from officers             |                                           |   | 375         |         |              |   | 475     |        
|Other assets, net                          |                                           |   | 540         |         |              |   | 568     |        
|                                           |                                           |   |             |         |              |   |         |        
|Total assets                               |                                           | $ | 211,966     |         |              | $ | 222,543 |        
|                                           |                                           |   |             |         |              |   |         |        
|Liabilities and stockholders equity       |                                           |   |             |         |              |   |         |        
|Current liabilities:                       |                                           |   |             |         |              |   |         |        
|                                           | Accounts payable                          |   | $           | 3,032   |              |   | $       | 1,808   |  
|                                           | Accrued compensation                      |   |             | 2,594   |              |   |         | 3,135   |  
|                                           | Other accrued liabilities                 |   |             | 333     |              |   |         | 357     |  
|                                           | Deferred revenue                          |   |             | 2,375   |              |   |         | 3,082   |  
|                                           | Current portion of equipment financing    |   |             | 2,170   |              |   |         | 2,027   |  
|                                           |                                           |   |             |         |              |   |         |        
|Total current liabilities                  |                                           |   | 10,504      |         |              |   | 10,409  |        
|Noncurrent portion of equipment financing  |                                           |   | 3,435       |         |              |   | 3,749   |        
|Deferred revenue                           |                                           |   | 287         |         |              |   | 221     |        
|Other noncurrent liabilities               |                                           |   | 1,751       |         |              |   | 1,600   |        
|Commitments and contingencies              |                                           |   |             |         |              |   |         |        
|Stockholders equity:                      |                                           |   |             |         |              |   |         |        
|                                           | Common stock                              |   |             | 24      |              |   |         | 24      |  
|                                           | Additional paid-in capital                |   |             | 251,643 |              |   |         | 251,357 |  
|                                           | Deferred stock compensation               |   |             | (1,786  | )            |   |         | (2,232  | )
|                                           | Accumulated deficit                       |   |             | (54,288 | )            |   |         | (44,602 | )
|                                           | Accumulated other comprehensive income    |   |             | 396     |              |   |         | 2,017   |  
|                                           |                                           |   |             |         |              |   |         |        
|Total stockholders equity                 |                                           |   | 195,989     |         |              |   | 206,564 |        
|                                           |                                           |   |             |         |              |   |         |        
|Total liabilities and stockholders equity |                                           | $ | 211,966     |         |              | $ | 222,543 |        
|                                           |                                           |   |             |         |              |   |         |        

See accompanying notes.

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CALIPER TECHNOLOGIES CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)

|                                                                          |                                                 |   |                              |        |      |   |        |       | 
|------------------------------------------------------------------------- | ----------------------------------------------- | - | ---------------------------- | ------ | ---- | - | ------ | ----- | 
|                                                                          |                                                 |   | Three Months Ended March 31,
|                                                                          |                                                 |   |                             
|                                                                          |                                                 |   | 2002                         |        | 2001
|                                                                          |                                                 |   |                              |        |     
|Revenue:                                                                  |                                                 |   |                              |        |      |   |        |      
|                                                                          | Product revenue                                 |   | $                            | 3,195  |      |   | $      | 1,345 | 
|                                                                          | Related party revenue                           |   |                              | 1,720  |      |   |        |      | 
|                                                                          | License fees and contract revenue               |   |                              | 2,126  |      |   |        | 8,448 | 
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Total revenue                                                             |                                                 |   | 7,041                        |        |      |   | 9,793  |      
|Costs and expenses:                                                       |                                                 |   |                              |        |      |   |        |      
|                                                                          | Cost of product revenue                         |   |                              | 2,093  |      |   |        | 978   | 
|                                                                          | Cost of product revenue-related party           |   |                              | 444    |      |   |        |      | 
|                                                                          | Research and development                        |   |                              | 11,052 |      |   |        | 8,853 | 
|                                                                          | Selling, general and administrative             |   |                              | 4,657  |      |   |        | 3,190 | 
|                                                                          | Amortization of deferred stock compensation (1) |   |                              | 446    |      |   |        | 768   | 
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Total costs and expenses                                                  |                                                 |   | 18,692                       |        |      |   | 13,789 |      
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Operating loss                                                            |                                                 |   | (11,651                      | )      |      |   | (3,996 | )    
|Interest income, net                                                      |                                                 |   | 1,965                        |        |      |   | 2,900  |      
|Gain on settlement of litigation                                          |                                                 |   |                             |        |      |   | 27,500 |      
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Net
income (loss)                                                         |                                                 | $ | (9,686                       | )      |      | $ | 26,404 |      
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Net income (loss) per share, basic                                        |                                                 | $ | (0.40                        | )      |      | $ | 1.11   |      
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Shares used in computing net income (loss) per share, basic               |                                                 |   | 24,237                       |        |      |   | 23,835 |      
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Net income (loss) per share, diluted                                      |                                                 | $ | (0.40                        | )      |      | $ | 1.03   |      
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Shares used in computing net income (loss) per share, diluted             |                                                 |   | 24,237                       |        |      |   | 25,681 |      
|                                                                          |                                                 |   |                              |        |      |   |        |      
|(1) Amortization of deferred stock compensation relates to the following: |                                                 |   |                              |        |      |   |        |      
|Research and development                                                  |                                                 | $ | 290                          |        |      | $ | 268    |      
|General and administrative                                                |                                                 |   | 156                          |        |      |   | 500    |      
|                                                                          |                                                 |   |                              |        |      |   |        |      
|Total                                                                     |                                                 | $ | 446                          |        |      | $ | 768    |      
|                                                                          |                                                 |   |                              |        |      |   |        |      

See accompanying notes.

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CALIPER TECHNOLOGIES CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

|                                                                                     |                                                               |                                                |         |                    |        |      |         |         |        |  
|------------------------------------------------------------------------------------ | ------------------------------------------------------------- | ---------------------------------------------- | ------- | ------------------ | ------ | ---- | ------- | ------- | ------ | -
|                                                                                     |                                                               |                                                |         | Three Months Ended
|                                                                                     |                                                               |                                                |         | March 31,         
|                                                                                     |                                                               |                                                |         |                   
|                                                                                     |                                                               |                                                |         | 2002               |        | 2001
|                                                                                     |                                                               |                                                |         |                    |        |     
|Operating activities                                                                 |                                                               |                                                |         |                    |        |      |         |        
|Net income (loss)                                                                    |                                                               | $                                              | (9,686  | )                  |        | $    | 26,404  |        
|Adjustments to reconcile net income (loss) to net cash used in
operating activities: |                                                               |                                                |         |                    |        |      |         |        
|                                                                                     | Gain
on settlement of litigation and non-cash license revenue |                                                |         |                   |        |      |         | (32,500 | )     
|                                                                                     | Depreciation and amortization                                 |                                                |         | 1,249              |        |      |         | 746     |       
|                                                                                     | Amortization of deferred stock compensation                   |                                                |         | 446                |        |      |         | 768     |       
|                                                                                     | Stock options issued to non-employees                         |                                                |         | (7                 | )      |      |         | (58     | )     
|                                                                                     | Changes in operating assets and liabilities:                  |                                                |         |                    |        |      |         |         |       
|                                                                                     |                                                               | Accounts receivable and other receivable       |         |                    | (697   | )    |         |         | 1,954  |  
|                                                                                     |                                                               | Inventories                                    |         |                    | (1,705 | )    |         |         | (1,812 | )
|                                                                                     |                                                               | Prepaid expenses and other current assets      |         |                    | (325   | )    |         |         | (289   | )
|                                                                                     |                                                               | Security deposits and other assets             |         |                    | 28     |      |         |         |       |  
|                                                                                     |                                                               | Notes receivable from officers                 |         |                    | 100    |      |         |         | 100    |  
|                                                                                     |                                                               | Accounts payable and other accrued liabilities |         |                    | 1,200  |      |         |         | (1,606 | )
|                                                                                     |                                                               | Accrued compensation                           |         |                    | (541   | )    |         |         | (74    | )
|                                                                                     |                                                               | Deferred revenue                               |         |                    | (641   | )    |         |         | (630   | )
|                                                                                     |                                                               | Other noncurrent liabilities                   |         |                    | 151    |      |         |         | 138    |  
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Net cash used in operating activities                                                |                                                               |                                                | (10,428 | )                  |        |      | (6,859  | )      
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Investing activities                                                                 |                                                               |                                                |         |                    |        |      |         |        
|Purchases of marketable securities                                                   |                                                               |                                                | (43,823 | )                  |        |      | (68,572 | )      
|Proceeds from sale of marketable securities                                          |                                                               |                                                | 33,149  |                    |        |      | 22,645  |        
|Proceeds from maturities of marketable securities                                    |                                                               |                                                | 36,256  |                    |        |      | 27,180  |        
|Purchase of property and equipment                                                   |                                                               |                                                | (2,905  | )                  |        |      | (1,810  | )      
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Net cash provided by (used in) investing activities                                  |                                                               |                                                | 22,677  |                    |        |      | (20,557 | )      
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Financing activities                                                                 |                                                               |                                                |         |                    |        |      |         |        
|Proceeds from equipment financing                                                    |                                                               |                                                | 335     |                    |        |      | 400     |        
|Payments of obligations under equipment financing                                    |                                                               |                                                | (506    | )                  |        |      | (457    | )      
|Proceeds from issuance of common stock                                               |                                                               |                                                | 293     |                    |        |      | 363     |        
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Net cash provided by financing activities                                            |                                                               |                                                | 122     |                    |        |      | 306     |        
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Net increase (decrease) in cash and cash equivalents                                 |                                                               |                                                | 12,371  |                    |        |      | (27,110 | )      
|Cash and cash equivalents at beginning of period                                     |                                                               |                                                | 10,655  |                    |        |      | 36,294  |        
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Cash and cash equivalents at end of period                                           |                                                               | $                                              | 23,026  |                    |        | $    | 9,184   |        
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Supplemental disclosure of cash flow information                                     |                                                               |                                                |         |                    |        |      |         |        
|Interest paid                                                                        |                                                               | $                                              | 171     |                    |        | $    | 160     |        
|                                                                                     |                                                               |                                                |         |                    |        |      |         |        
|Supplemental disclosure of significant noncash investing
activities                  |                                                               |                                                |         |                    |        |      |         |        
|Other receivable                                                                     |                                                               |                                                |        |                    |        |      | 25,501  |        
|Investment in common stock                                                           |                                                               |                                                |        |                    |        |      | 4,950   |        
|Other assets                                                                         |                                                               |                                                |        |                    |        |      | 2,049   |        

See accompanying notes.

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CALIPER TECHNOLOGIES CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002
(Unaudited)

NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring entries) considered
necessary for a fair presentation have been included. Operating results for
the three months ended March 31, 2002 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2002. For
further information, refer to the financial statements and notes thereto
included in the Annual Report on Form 10-K for the year ended December 31, 2001
filed by Caliper Technologies Corp.

PRINCIPLES OF CONSOLIDATION

Our condensed consolidated financial statements as of March 31, 2002
include the accounts of Caliper Europe GmbH formed on
January 22, 2002, and
significant intercompany balances and transactions are eliminated.

REVENUE RECOGNITION

Revenue is earned from Calipers collaboration agreement, Technology
Access Program agreements, LabChip® High Throughput Screening System, Automated
Microfluidics Systems 90, Applications Developer Program, licensing and royalty
agreements and government grants.

Collaboration agreement

Revenue from development activities under Calipers collaboration
agreement is recorded in the period in which the costs are incurred. Direct
costs associated with this contract are reported as research and development
expense. Revenue related to the reimbursement of costs for the supply of chips
and reagents to Calipers collaboration partner is recognized upon shipment.
Calipers share of gross margin on components of the LabChip® system sold by
the collaboration partner is recognized as revenue upon shipment by the
collaboration partner to the end user.

Technology access program agreements

Caliper had entered into multi-year Technology Access Program agreements
that included: (1) access to existing technology; (2) a multi-year subscription
for technology developed during the subscription period; (3) development and
support services; and (4) access to prototype LabChip® systems developed during
the subscription period. Caliper allocates the total arrangement fees to each
element based on fair value. Fair value is based on renewal rates for
subscriptions, prices established by Calipers management having the relevant
authority for development and support services and the price at which a program
participant has the ability to purchase unspecified quantities of a specific
prototype product.

Product revenue is recognized upon transfer of title to the customer.
Subscription fees are recognized ratably over the subscription period. When
payment of the subscription fee is contingent upon reaching a milestone,
revenue is deferred until the milestone is met. Support and development
services revenue is recognized in the periods the costs are incurred. In
December 2001, the last of the agreements with Calipers Technology Access
Program customers was amended and converted into a commercial agreement. There
are no further technology access fees or subscription fees recognized with
products and services purchased by former Technology Access Program customers
after December 2001. Revenue is recognized for all former Technology Access
Program customers upon shipment and transfer of title to the product to the
customer or when the assay development service has been provided by Caliper.
Under the amended agreements with Calipers Technology Access Program
customers, Caliper agreed to convert technology access and subscription fees
still outstanding and available towards the purchase of products and services
that can be utilized by the customer no later than December 2002. As of March
31, 2002, a total of $317,000 of this revenue was deferred. We expect to
recognize this

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deferred revenue through the fourth quarter of 2002 as products and
services are purchased by our previous Technology Access Program customers.

LabChip® High Throughput Screening System, Automated Microfluidics Systems 90
and Applications Developer Program

Product revenue is recognized upon the transfer of title to customers and
is recorded net of discounts and allowances. Service revenue is recognized
ratably over the contract service term. Customers are able to purchase
instruments, chips, support services and custom solutions directly from
Caliper, and they will be charged on a data point pricing basis for their usage
of chips. Caliper will offer discounts based on the volume of products and
services purchased. Caliper publishes a catalog of our commercially available
chips and high throughput system products and the prices for each product
configuration. Caliper provides a one-year limited warranty on the High
Throughput Screening systems and a 90-day warranty on chips for customers.
After the warranty period has expired, customers may purchase annual
maintenance contracts from Caliper that entitles them to continued system
upgrades and operational support. Caliper also provides custom chip design
services to develop new microfluidic applications or expand existing
applications. Management will continue to analyze historical returns, current
economic trends, and changes in customer demand and acceptance of Calipers
products when evaluating the necessity and or adequacy in future periods for
sales returns and other sales allowance.

Licensing and Royalty

Revenue from Calipers up-front license fees is recognized when the
earnings process is complete and no further obligations exist. If further
obligations exist, the up-front license fee is recognized ratably over the
obligation period. Royalties from licenses are based on third-party sales and
recorded as earned in accordance with contract terms, when third-party results
are reliably measured and collectibility is assured.

As part of the comprehensive settlement agreement with Aclara Biosciences
entered into on January 7, 2001, Aclara is obligated to pay Caliper a minimum
annual royalty of $2.5 million on licensed product sales in both 2002 and 2003
offset by quarterly royalty payments due on Aclara licensed instrument or
LabCard product sales. For the quarter ending March 31, 2002, Caliper
recognized $625,000 in minimum royalties on Aclara sales of licensed
instruments and LabCards.

Government grants

Calipers grant from the National Institute of Standards and Technology
provides for the reimbursement of qualified expenses for research and
development as defined under the terms of the grant agreement. Revenue under
grant agreements is recognized when the related research expenses are incurred.

STOCK-BASED COMPENSATION

Caliper accounts for its stock options and equity awards in accordance
with the provisions of Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, and has elected to follow the disclosure only
alternative prescribed by the Financial Accounting Standards Boards SFAS No.
123, Accounting for Stock-Based Compensation. Caliper accounts for stock
options issued to non-employees in accordance with the provisions of SFAS No.
123 and Emerging Issues Task Force 96-18.

NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is calculated based on the
weighted-average number of common shares outstanding during the period. Diluted
net income (loss) per share would give effect to the dilutive effect of common
stock equivalents consisting of stock options and warrants (calculated using
the treasury stock method). Potentially dilutive securities have been excluded
from the diluted earnings per share computations as they have an antidilutive
effect due to Calipers net loss.

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A reconciliation of shares used in the calculations is as follows (in
thousands):

|                                                                    |  |                    |        |      |  |  |        |  
|------------------------------------------------------------------- |  | ------------------ | ------ | ---- |  |  | ------ | -
|                                                                    |  | Three Months Ended
|                                                                    |  | March 31,         
|                                                                    |  |                   
|                                                                    |  | 2002               |        | 2001
|                                                                    |  |                    |        |     
|Basic:                                                              |  |                    |        |      |  |  |        |  
|Weighted-average shares of common stock outstanding                 |  |                    | 24,240 |      |  |  | 23,853 |  
|Less: weighted-average shares subject to repurchase                 |  |                    | (3     | )    |  |  | (18    | )
|                                                                    |  |                    |        |      |  |  |        |  
|Weighted-average shares used in basic net income (loss)
per share   |  |                    | 24,237 |      |  |  | 23,835 |  
|                                                                    |  |                    |        |      |  |  |        |  
|Diluted:                                                            |  |                    |        |      |  |  |        |  
|Weighted average shares of common stock outstanding                 |  |                    | 24,240 |      |  |  | 23,853 |  
|Plus: weighted average shares of common stock equivalents           |  |                    |       |      |  |  | 1,846  |  
|Less: weighted average shares subject to repurchase                 |  |                    | (3     | )    |  |  | (18    | )
|                                                                    |  |                    |        |      |  |  |        |  
|Weighted average shares used in diluted net income (loss)
per share |  |                    | 24,237 |      |  |  | 25,681 |  
|                                                                    |  |                    |        |      |  |  |        |  

NOTE 2  INVENTORIES

Inventories consist of the following (in thousands):

|                |       |   |           |       |              |   |       |       | 
|--------------- | ----- | - | --------- | ----- | ------------ | - | ----- | ----- | 
|                |       |   | March 31, |       | December 31,
|                |       |   | 2002      |       | 2001        
|                |       |   |           |       |             
|Raw material    |       | $ | 2,053     |       |              | $ | 1,952 |      
|Work in process |       |   | 2,163     |       |              |   | 657   |      
|Finished goods  |       |   | 900       |       |              |   | 802   |      
|                |       |   |           |       |              |   |       |      
|                | Total |   | $         | 5,116 |              |   | $     | 3,411 | 
|                |       |   |           |       |              |   |       |      

NOTE 3  COMPREHENSIVE INCOME (LOSS)

The components of
comprehensive income (loss) for the three months ended
March 31, 2002 and 2001 are as follows (in thousands):

|                                                |  |                    |         |      |  |   |        | 
|----------------------------------------------- |  | ------------------ | ------- | ---- |  | - | ------ | 
|                                                |  | Three Months Ended
|                                                |  | March 31,         
|                                                |  |                   
|                                                |  | 2002               |         | 2001
|                                                |  |                    |         |     
|Net income (loss)                               |  | $                  | (9,686  | )    |  | $ | 26,404 | 
|Unrealized gain (loss) on marketable securities |  |                    | (1,621  | )    |  |   | 898    | 
|                                                |  |                    |         |      |  |   |        | 
|Comprehensive income (loss)                     |  | $                  | (11,307 | )    |  | $ | 27,302 | 
|                                                |  |                    |         |      |  |   |        | 

NOTE 4  RELATED PARTY

For the quarter ended
March 31, 2002, Caliper reported $1.7 million in
related party revenues from sales of Caliper 250 High Throughput Screening System products, LabChips, datapoints and
assay development services to Amphora. Of the $1.7 million, $785,000 related
to high throughput screening system products and, Caliper deferred 28% of the
gross profit, or $98,000 that reflects Calipers retained ownership interest in
the products sold to Amphora. Since commencement of high throughput screening
system product sales to Amphora in September 2001, Caliper has deferred
$461,000 of the gross profits on these sales. Caliper recognized $21,000 of
this deferred gross profit in 2001 and $30,000 for the quarter ended March 31,
2002. The remaining $410,000 will be recognized as revenue ratably over the
next 36 months as Amphora records depreciation on its Caliper 250 High
Throughput Screening Systems.

NOTE 5  LITIGATION

On March 22, 1999, Caliper filed a lawsuit in California Superior Court
for the County of Santa Clara against Aclara Biosciences, Inc. and Calipers
former patent counsel, a patent attorney named Bertram Rowland, and his former
law firm, Flehr, Hohbach, Test, Albritton and Herbert alleging that all the
defendants misappropriated certain of Calipers trade secrets relating to
Caliper business

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plans, patents and intellectual property strategy. The suit also alleges
that Calipers former patent counsel committed a breach of the duties they owed
to Caliper as its former attorneys. On September 14, 2000, Caliper reached a
settlement agreement with Dr. Rowland and Flehr, Hohbach, Albritton, Test and
Herbert in this case. The settlement provided Caliper with a $12.0 million cash
payment from these defendants as well as other terms. This settlement
had no
effect on Calipers lawsuits with Aclara. In this same case, on October 27,
2000, the jury returned a verdict in favor of Caliper and against Aclara on
Calipers claims for misappropriation of trade secrets and conversion of
property. The jury awarded Caliper $52.6 million for damages to Caliper and
unjust enrichment to Aclara, which the court reduced to $35.6 million.

On January 7, 2001, Caliper announced a comprehensive settlement agreement
with Aclara BioSciences, Inc. of all pending litigation between the two
companies. Under the terms of the settlement both companies agreed to dismiss
all suits and countersuits in the federal and state court actions and to
cross-license selected patents. The settlement provides Caliper with freedom to
operate under Aclaras 022 family of patents, which includes the 015 and
other patents, for its glass chips and related instruments through a fully
paid, royalty-free license. Under the terms of the agreement, Aclara agreed to
pay Caliper $37.5 million due in 2002 over a three-year period in a combination
of stock, cash, and committed minimum royalties. Caliper also agreed to license
to Aclara the Ramsey family of patents for use with Aclaras polymer chips
and related instruments in exchange for license fees and royalties. The two
companies have also agreed to an alternative dispute resolution procedure for
handling potential future patent disagreements out of court.

On March 22, 2001, in connection with the settlement agreement mentioned
above, Caliper received 900,000 shares of Aclaras common stock with a then
current fair value of $4.3 million. The common stock is restricted from sale
for a period of 18 months from the date of the settlement agreement. As a
component of the settlement agreement, Aclara has guaranteed the value of the
Aclara common stock to be $32.5 million at the time of Calipers sale of the
stock, provided that such sale occurs in the period from 18 months to 24 months
from the effective date of the settlement agreement. Aclara entered into a
fully-funded $32.5 million standby letter of credit in favor of Caliper to
secure its performance under this potential obligation. Accordingly, Caliper
recognized the entire $32.5 million settlement in the quarter ended March 31,
2001. Caliper recognized $5.0 million of license fee revenue and $27.5 million
of litigation settlement in the income statement pursuant to the terms
contained in the settlement agreement. Caliper will also receive royalties on
certain Aclara product sales commencing in 2002 through 2008 with a minimum
annual royalty payment of $2.5 million by December 31st in each of years 2002
and 2003. Caliper does not have any further obligations under the agreement.

Caliper has accounted for this arrangement by initially recording $4.3
million in Aclara stock at fair market value, with a note receivable with a
corresponding face value of $28.2 million including other receivable for the
fully funded letter of credit which was reduced by the initial fair value ($2.7
million) of an embedded derivative. The latter two elements in combination
represent the guarantee. The receivable will be accreted to its face value of
$28.2 million over the life of the receivable using the level-yield method.

Commencing on June 7, 2001, Caliper and three of its officers and
directors (David V. Milligan, Daniel L. Kisner and James L. Knighton) were
named as defendants in three securities class action lawsuits filed in the
United States District Court for the Southern District of New York. The cases
have been consolidated under the caption In re Caliper Technologies Corp.
Initial Public Offering Securities Litigation, 01 Civ. 5072 (SAS)
(GBD). Similar complaints were filed in the same Court against
hundreds of other public companies that conducted IPOs of their
common stock since the late 1990s (the IPO Lawsuits). On
August 8, 2001, the IPO Lawsuits were consolidated for pretrial
purposes before United States Judge Shira Scheindlin of the Southern
District of New York. Together, those cases are denominated In re
Initial Public Offering Securities Litigation, 21 MC 92 (SAS). On
April 19, 2002, a Consolidated Amended Complaint was filed alleging claims
against Caliper and the individual defendants under Sections 11 and 15 of the
Securities Act of 1933, and under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder. The
Consolidated Amended Complaint also names certain underwriters of Calipers
December 1999 initial public offering of common stock. The Complaint alleges
that these underwriters charged excessive, undisclosed commissions to investors
and entered into improper agreements with investors relating to aftermarket
transactions. The Complaint seeks an unspecified amount of money damages.
Based on information currently available to Caliper, Caliper believes that the
claims alleged against Caliper and its officers and directors are without
merit. Caliper intends to defend this case vigorously.

On April 16, 2002, Caliper filed a lawsuit against Molecular Devices
Corporation in the United States District Court for the Northern District of
California. In that case, Caliper Technologies Corp. v. Molecular Devices
Corporation, No. C-02-1837 (N.D. Cal.), Caliper asserts that Molecule Devices
IMAP  products infringe one or more claims of United States
Patent No. 6,287,774, which Caliper owns. Calipers complaint seeks both
injunctive relief precluding further infringement of the patent and damages.
The answer to the Complaint was filed on May 8 and asserts a counterclaim
seeking a declaratory judgment that the patent is not infringed and is invalid.
Caliper believes the counterclaim to be without merit. The litigation is
still at an early stage, and no trial date has yet been set by the court.

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NOTE 6  RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141, Business Combinations and No. 142, Goodwill and Other Intangible
Assets. The statements eliminate the pooling-of-interests method of
accounting for business combinations and require that goodwill and certain
intangible assets not be amortized. Instead, these assets will be reviewed for
impairment annually with any related losses recognized in earnings when
incurred. The statements will be effective for Caliper as of January 1, 2002
for any existing goodwill and intangible assets and for business combinations
initiated after June 30, 2001. Caliper has not recorded goodwill and other
intangibles or entered into any business combinations as of March 31, 2002.

In July 2001, the FASB also issued SFAS No. 143, Accounting for Asset
Retirement Obligations and in August 2001, issued No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS No. 143 establishes
accounting standards for the recognition and measurement of an asset retirement
obligation and is effective for financial statements issued for years beginning
after June 15, 2002. SFAS No. 144 addresses financial accounting and reporting
for the impairment or disposal of long-lived assets, superseding SFAS No. 121
and is effective for Caliper January 1, 2002. The adoption of FASB No. 144 did
not have a material impact on Calipers financial position or results of
operations.

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

This Managements Discussion and Analysis of Financial Condition and
Results of Operations as of March 31, 2002 and for the three month periods
ended March 31, 2002 and March 31, 2001 should be read in conjunction with
Managements Discussion and Analysis of Financial Condition and Results of
Operations included in our Annual Report on Form 10-K for the year ended
December 31, 2001.

The discussion in this report contains forward-looking statements that
involve risks and uncertainties, such as statements of our plans, objectives,
expectations and intentions. The cautionary statements made in this report
should be read as applying to all related forward-looking statements wherever
they appear in this report. Our actual results could differ materially from
those discussed here. Factors that could cause or contribute to these
differences include those discussed in Factors Affecting Operating Results
below as well as those discussed elsewhere.

Overview

We are a leader in lab-on-a-chip technologies that miniaturize, integrate
and automate many laboratory processes. We develop, manufacture and sell our
proprietary LabChip systems to pharmaceutical and other companies. We believe
our LabChip systems have the potential to assemble the power and reduce the
scale of entire laboratories full of equipment and people. From Calipers
inception in July 1995 through September 2001, our operating activities were
primarily devoted to research, development and commercialization of
technologies involving the manipulation of very small amounts of fluid, which
are referred to as microfluidic technologies, and first-generation products
such as the Agilent 2100 Bioanalyzer, LabChip kits and our high throughput
screening systems, recruiting personnel, business development, raising capital
and acquiring assets. During this period our revenues were principally from
contract services and, to a lesser extent, from product sales. In September
2001, we initiated a new commercial program for selling our high throughput
screening (HTS) products. This program replaced our fee-based Technology Access
Program with direct sales of instruments, chips, services and custom solutions
to customers based upon a product catalogue and established price list. We also
introduced a new instrument platform, the Caliper 250 HTS system, which
includes instruments for assay development and screening, and a menu of chips
that perform standard assays.

Since our inception, we have incurred significant losses and, as of March
31, 2002, we had an accumulated deficit of $54.3 million. Our losses have
resulted principally from costs incurred in research and development,
manufacturing scale-up, and from general and administrative costs associated
with our operations. We expect to continue to incur substantial research and
development, manufacturing scale-up and general and administrative costs. As a
result, we will need to generate significantly higher revenue to achieve
profitability.

To date, we have generated a substantial portion of our revenue from a
limited number of sources. During the quarter ended March 31, 2002, Amphora, a
related party, alone accounted for 24% our revenue, Agilent alone accounted for
30% of our revenue and one commercial customer accounted for 13% of our
revenue. During the quarter ended March 31, 2001, our initial licensing of the
Ramsey family of patents to Aclara accounted for 51% of our revenue, Agilent
alone accounted for 24% of our revenue and our three Technology Access Program
customers collectively accounted for 18% of our revenue in this period.
Although we are seeking to expand our customer base, we cannot assure you that
these efforts will be successful.

Under our collaboration agreement, Agilent funds our research and
development expenditures related to the collaboration, reimburses us for our
costs of supplying chips and reagents to Agilent and pays us a share of the
gross margin earned on all components of LabChip systems they sell. We record
revenue from development and support activities under our collaboration
agreement in the period in which the costs are incurred. We report direct costs
associated with this contract as research and development expense. We recognize
revenue related to the reimbursement of costs for the supply of chips and
reagents to Agilent upon shipment. We recognize as revenue our share of gross
margin on components of the LabChip system sold by Agilent upon shipment to the
end user. Agilent began marketing and sales efforts for the Agilent 2100
Bioanalyzer in late 1999. Sales of new and innovative instrumentation such as
the Agilent 2100 Bioanalyzer involve a long sales cycle, requiring customer
training and demonstration periods. Sales of the Agilent 2100 Bioanalyzer
increased 158% during the course of 2001 as compared to 2000 indicating, we
believe, a growing market acceptance of this technology.

In May 2002, we
notified Agilent of our election to terminate the exclusive
collaboration portion of the agreement between the companies, effective
as of May 2003. We are currently engaged in negotiations with
Agilent regarding the terms of an ongoing relationship between the
parties beyond May 2003. If we do not enter into a new agreement
before that time, then under the existing agreement the
parties relationship would change, including as follows: we
will cease to receive development funding for new products; we will
grant Agilent a non-exclusive license to use the lab-on-a-chip
technologies that we have developed up to that time in order to
develop new products in substantially the same field that applied
during the collaboration; we will also transfer chip manufacturing
know-how and receive royalties on Agilents sales of systems
that employ our patented technologies; and beginning in November
2003, both Caliper and Agilent will have the right to sell
collaboration products, with reciprocal supply arrangements.

Results of Operations

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Three Months Ended March 31, 2002 and 2001

Revenue. Total revenue was $7.0 million for the three months ended March
31, 2002 as compared to $9.8 million for the same three-month period in 2001.
This decrease in comparable first quarter total revenues was principally from
the initial $5.0 million in licensing fees that was part of a litigation
settlement with Aclara BioSciences included in last years first quarter total
revenues, offset by substantial increases in product sales to commercial
customers, Amphora Discovery Corp., a related party, and from our collaboration
with Agilent.

Related party sales were $1.7 million for the three months ended March 31,
2002 resulting from sales of the Caliper 250 HTS System products to Amphora
Discovery Corp. There were no related party revenues for the corresponding
period of 2001. Product revenue from unrelated customers was $3.2 million for
the three months ended March 31, 2002 compared to $1.3 million in the same
three-month period in 2001. This increase of $1.9 million in first quarter
product revenues over last year was driven by a 38% product volume growth under
our commercial collaboration with Agilent, and a 287% increase in high
throughput system product sales to commercial customers. Additionally, we
experienced this increase in high throughput system product sales in part due
to some of our conversion from a fee-based technology access program model to a
commercial high throughput screening products business.

License fees and contract revenues decreased to $2.1 million for the
quarter ended March 31, 2002, compared to $8.4 million for the same period in
2001 due to the anticipated declines in our Technology Access Program contract
revenue and licensing fees. As a result of our conversion from a fee-based
technology access program model to a commercial high throughput screening
products business, Technology Access Program contract revenues declined $1.5
million in the first quarter of 2002 as compared to the same period of 2001.
Licensing fees declined $4.4 million in the first quarter of 2002 as compared
to the similar period in 2001 as a result of the $5.0 million initial licensing
fee for the Ramsey family of patents to Aclara included in the first quarter of
2001.

Cost of Product Revenues.Cost of product revenue represents
manufacturing costs incurred in the microfluidic instrument production process,
including component materials, assembly labor and overhead, packaging and
delivery cost. Cost of products sold was $444,000 for the related party sales
to Amphora Discovery Corp. for the three months ended March 31, 2002. The
profit margins on product sales to Amphora will vary due to the volume of
products purchased and the corresponding commercial volume discounts earned.
Cost of all other products sold were $2.1 million for the three months ended
March 31, 2002 compared to $978,000 in the same period of 2001. Profit margins
on product sales to unrelated customers in the first quarter of 2002 improved
to $1.1 million as compared to $367,000 in the comparable period of 2001 due to
the increased sales of Agilent 2100 Bioanalyzer systems and sales of Calipers
own products. Product mix will affect future profit margins as Caliper earns a
higher return from its own products sold as opposed to sharing gross margin
revenues on collaboration products with Agilent Technologies.

Research and Development Expenses.Research and development expenses
consist primarily of salaries and related personnel costs, fees paid to
consultants and outside service providers for chip development, material costs
for prototype and test units, legal expenses resulting from intellectual
property prosecution, and other expenses related to the design, development,
testing and enhancement of our products. We expense our research and
development costs as they are incurred. Research and development expenses were
$11.1 million for the three months ended March 31, 2002 compared to $8.9
million for the same three-month period of 2001. This increase of $2.2 million
was primarily attributable to continued growth of research and development
activities, including $1.8 million related to increased personnel and services
to support our expanded next generation high throughput system and microfluidic
chip development, partner collaboration and initial product launches and
$290,000 due to expansion in research facilities and activities.

Our research and development focus has been on product development in the
areas of new applications, microfluidic instruments with expanded capabilities,
our LibraryCard system and high throughput genomic systems. We intend to
continue LabChip systems development with increasingly high throughput
capabilities and develop a broader range of applications for our LabChip
technology. To advance our high throughput systems and achieve the levels of
throughput necessary to meet customers demands, we need to continue to develop
and manufacture sipper chips with more than four capillaries. Our current high
throughput systems operate with sipper chips with one and four capillaries,
small glass tubes used to draw compounds into the chip. In order to achieve the
levels of throughput that our customers desire, our research and development
efforts are focusing on a LabChip system that can accommodate more than four
capillaries. We expect to continue our efforts in these areas of research and
development even though the risks of being successful are significant and we
may even not be able to develop the necessary technology to achieve the
advancements we currently envision. We expect research and development spending
to continue to increase over the next several years as we expand our research
and product development efforts although at a lesser rate than our revenue
growth rate.

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Selling, General and Administrative Expenses.Selling, general and
administrative expenses consist primarily of salaries and related expenses for
executive, finance and other administrative personnel, recruiting expenses,
marketing and product promotional costs, professional fees, and other corporate
expenses including business development and general legal activities. Selling,
general and administrative expenses were $4.7 million for the quarter ended
March 31, 2002 compared to $3.2 million for the quarter ended March 31, 2001.
The increase of $1.5 million was primarily related to $521,000 in expanded
product promotion, salesforce detailing and marketing research efforts,
$429,000 for legal fees related to expanded patent registration and commercial
initiatives and the remaining balance due to overall expansion in our
operations and facilities. We expect selling and administrative expenses to
continue to increase over the next several years to support our growing
business activities and the commercialization of our products.

Amortization of Deferred Stock Compensation.Deferred stock compensation
represents the difference between the deemed fair value of our common stock for
accounting purposes and the exercise price of options at the date of grant.
This amount is being amortized over the respective vesting periods of the
individual stock options using the graded vesting method. We recorded
amortization of deferred compensation of $446,000 in the three months ended
March 31, 2002, compared to $768,000 as of March 31, 2001. We expect to record
amortization expense for deferred compensation as follows: $994,000 for the
remainder of 2002, $670,000 during 2003 and $122,000 during 2004. The amount
of deferred compensation expense to be recorded in future periods may decrease
if unvested options for which deferred compensation has been recorded are
subsequently canceled.

Interest Income, Net.Interest income, net consists of income from our
cash and investments offset by expenses related to our financing obligations.
Interest income, net was $2.0 million for the three months ended March 31, 2002
compared to $2.9 million for the comparable three months of 2001. The decrease
primarily resulted from a lower cash, cash equivalents and marketable
securities balances during the first quarter of 2002 as compared to the same
period in 2001 and, to a lesser extent, the declining interest rate yields in
the first quarter of 2002 as compared to last year.

Gain on Settlement of Litigation.The litigation settlement was $27.5
million for the quarter ended March 31, 2001, resulting from the comprehensive
settlement agreement with Aclara for the dismissal of all suits and
countersuits between the two companies, which occurred in January 2001.

LIQUIDITY AND CAPITAL RESOURCES

Our cash, cash equivalents and marketable securities were $151.3 million
at March 31, 2002 compared to $166.2 million at December 31, 2001. We used cash
of $10.4 million for operations for the three-month period ended March 31, 2002
as compared to $6.9 million for the comparable period in 2001. Cash used in
the three months ended March 31, 2002 consisted primarily of the net loss of
$9.7 million, changes in operating assets and liabilities of $2.4 million,
offset in part by non-cash charges of $1.7 million related to amortization of
deferred stock compensation and depreciation and amortization expense. We also
have $3.2 million in a market rate account at March 31, 2002 pledged for
facilities deposits compared to $3.0 million at March 31, 2001.

As of March 31, 2002, we have a committed capital resource of $32.5
million as a result of a litigation settlement. As a component of the
settlement agreement, Aclara has effectively guaranteed the value of the Aclara
common stock to be $32.5 million at the time of our sale of the stock, provided
that the sale occurs in the period from 18 months to 24 months from the
effective date of the settlement agreement. Aclara has entered into a
fully-funded $32.5 million standby letter of credit in favor of us to secure
its performance under this potential obligation.

Net cash provided by investing activities was $22.7 million for the three
months ended March 31, 2002 as compared to net cash used in investing of $20.6
million for the comparable period in 2001. Net cash used in investing consists
primarily of purchases of available-for-sale investments as well as capital
expenditures offset by proceeds from sales and maturities of available-for-sale
investments.

Net cash provided by financing activities was $122,000 for the three
months ended March 31, 2002 as compared to $306,000 for the comparable period
in 2001. Net proceeds from financing activities for the quarter ended March
31, 2002 consisted of $335,000 from equipment financing and $293,000 from
employee stock option exercises, offset by repayments of equipment financing
arrangements of $506,000. Net proceeds from financing activities for the
quarter ended March 31, 2001 consisted of $400,000 from equipment financing and
$363,000 from employee stock option exercises, offset by repayments of
equipment financing arrangements of $457,000.

Our capital requirements depend on numerous factors, including market
acceptance of our products, the resources we devote to developing and
supporting our products, and other factors. We expect to devote substantial
capital resources to continue our research

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and development efforts, to expand our support and product development
activities, and for other general corporate activities. We also have
commitments to Amphora, a related party, to produce and deliver eleven high
throughput systems in 2002. Based on our long term strategic plan, we believe
that our current cash balances, together with the revenue to be derived from
our collaboration with Agilent and the commercial sales of our microfluidic
products and services will be sufficient to fund our operations at least
through the year 2003. Actual capital expenditures could vary considerably,
however, depending on opportunities that arise over the course of the 2002 and
2003 period. During or after this period, if cash generated by operations is
insufficient to satisfy our liquidity requirements, we may need to reduce our
research and development efforts, or sell additional equity or debt securities
or obtain additional credit arrangements. Additional financing may not be
available on terms acceptable to us or at all. The sale of additional equity or
convertible debt securities may result in additional dilution to our
stockholders or force delays in research and product development activities.

FACTORS AFFECTING OPERATING RESULTS

Our LabChip Systems may not achieve market acceptance, which could cause our
revenue to grow slowly or decline.

Our technologies are still in the early stages of development, and our
LabChip and HTS systems incorporating these technologies have only recently
been made commercially available. If our LabChip systems do not continue to
gain market further acceptance, we will be unable to generate significant sales
and our revenue will decline. The commercial success of our LabChip systems
will depend upon capital spending by our potential customers, and market
acceptance of the merits of our LabChip systems by pharmaceutical and
biotechnology companies, academic research centers and other companies that
rely upon laboratory experimentation. We have not yet demonstrated these
benefits. Market acceptance will depend on many factors, including:



| |  |  | our ability to demonstrate the advantages and potential economic
value of our LabChip systems over alternative well-established
technologies and products
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the extent of Agilents efforts to market the Agilent 2100 Bioanalyzer                                                                                   
|
| |  |  | our ability to market our high throughput systems                                                                                                        

Because the products comprising our LabChip systems have been in operation
for a limited period of time, their accuracy, reliability, ease of use and
commercial value have not been fully established. If the initial Agilent 2100
Bioanalyzer customers or our high throughput system customers do not approve of
our initial LabChip systems because these systems fail to generate the
quantities and quality of data they expect, are too difficult or costly to use,
or are otherwise deficient, market acceptance of these LabChip systems would
suffer and further sales may be limited. We cannot assure you that these
customers efforts to put our LabChip systems into use will continue or will be
expeditious or effective. Potential customers for our high throughput systems
may also wait for indications from our initial high throughput system customers
that our high throughput systems work effectively and generate substantial
benefits. Further, non-acceptance by the market of our initial LabChip systems
could undermine not only those systems but subsequent LabChip systems as well.

If we do not successfully introduce new products and expand the range of
applications for our LabChip Systems, we may experience a decline in revenue or
slow revenue growth and may not achieve or maintain profitability.

We intend to develop LabChip systems with increasingly high throughput
capabilities and develop a broad range of applications for our LabChip
technology. If we are unable to do so, our LabChip systems may not become
widely used and we may experience a decline in revenue or slow revenue growth
and may not achieve or maintain profitability.

In order for our high throughput systems to achieve the levels of
throughput necessary to meet customers demands, we need to develop and
manufacture sipper chips with more than four capillaries.Our current high
throughput systems operate with sipper chips with one and four capillaries,
small glass tubes used to draw compounds into the chip. In order to achieve the
levels of throughput that our customers desire, we may need to develop a
LabChip system accommodating more than four capillaries, which we may not be
able to do. If we cannot cost-effectively deliver chips with more than four
capillaries, we may not be able to attract new customers to purchase our high
throughput systems, which would seriously harm our future prospects.

We must develop new applications for existing LabChip instruments, which
we may not be able to do.The Agilent 2100 Bioanalyzer uses LabChip kits that
we specifically design for each application. We currently have LabChip kits
commercially

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available for seven applications relating to DNA, RNA and protein sizing
and quantification and analyzing cells. DNA and RNA are commonly used acronyms
for chemicals that contain, or transmit, genetic information in living things.
We currently are developing LabChip kits for other applications. If we are
unable to develop LabChip kits for specific applications required by potential
customers, those customers may not purchase the Agilent 2100 Bioanalyzer.

We must also continue to develop applications for our high throughput
systems. If we are not able to complete the development of these applications,
or if we experience difficulties or delays, we may lose our current Technology
Access Program customers and may not be able to obtain new customers.

We expect to incur future operating
losses and may not achieve profitability.

Other than in 2001, we have experienced significant operating losses each
year since our inception and expect to incur substantial additional operating
losses for at least the next two years, primarily as a result of expected
increases in expenses for manufacturing capabilities, research and product
development costs and general and administrative costs. We may not achieve
profitability in future years. For example, we experienced net losses of
approximately $3.0 million in 1998, $14.4 million in 1999 and $13.3 million in
2000 with only a profit of $3.8 million earned in 2001. Without our litigation
settlement and reimbursement of $27.5 million in 2001, we would have also had a
net loss in 2001. In the first three months of 2002, we have experienced a loss
of $9.7 million. As of March 31, 2002, we had an accumulated deficit of
approximately $54.3 million. Our losses have resulted principally from costs
incurred in research and development and from general and administrative costs
associated with our operations. These costs have exceeded our litigation
settlement and reimbursement, interest income and revenue which, to date, have
been generated principally from collaborative research and development
agreements, technology access fees, cash and investment balances and, to a
lesser extent, product sales and government grants.

Our operating results fluctuate significantly and any failure to meet financial
expectations may disappoint securities analysts or investors and result in a
decline in our stock price.

Our quarterly operating results have fluctuated significantly in the past
and we expect they will fluctuate in the future as a result of many factors,
some of which are outside of our control. For example, our revenues have varied
dramatically as a result of new customers joining our Technology Access Program
and product shipments. It is possible that in some future quarter or quarters,
our operating results will be below the expectations of securities analysts or
investors. In this event, the market price of our common stock may fall
abruptly and significantly. Because our revenue and operating results are
difficult to predict, we believe that period-to-period comparisons of our
results of operations are not a good indication of our future performance.

If revenue declines in a quarter, whether due to a delay in recognizing
expected revenue or otherwise, our earnings will decline because many of our
expenses are relatively fixed. In particular, research and development and
general and administrative expenses and amortization of deferred stock
compensation are not affected directly by variations in revenue.

If Agilent determines that we may be violating a third-party patent, it may
terminate sales of the Agilent 2100 Bioanalyzer, which will decrease our
revenue.

Under our collaboration agreement with Agilent, Agilent may elect at any
time to stop developing, manufacturing or distributing any product that it
reasonably determines, on the advice of counsel, poses a substantial risk of
infringing a third-party patent. For example, if a third-party claims that we
are violating their patent, then Agilent may terminate marketing and selling of
the Agilent 2100 Bioanalyzer system, which Agilent began marketing in September
1999, which will decrease our future revenue.

Our products could infringe on the intellectual property rights of others,
which may cause us to engage in costly litigation and, if we are not
successful, could also cause us to pay substantial damages and prohibit us from
selling our products.

Third parties may assert infringement or other intellectual property
claims against us, such as the Aclara litigation that was settled and is
described under Note 5 of Part I  Item 1. Financial Statements. We may have
to pay substantial damages, including treble damages, for past infringement if
it is ultimately determined that our products infringe a third partys
proprietary rights. Further, we may be prohibited from selling our products
before we obtain a license, which, if available at all, may require us to pay
substantial royalties. Even if these claims are without merit, defending a
lawsuit takes significant time, may be expensive and may divert management
attention from other business concerns. We are aware of third-party patents
that may relate to our technology or potential products. We have also been
notified that third parties have attempted to provoke an interference with one
issued U.S. patent that we have exclusively licensed to determine the priority
of inventions. Any public announcements related to litigation or interference

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proceedings initiated or threatened against us could cause our stock price
to decline. We settled intellectual property litigation with Aclara concerning
one family of Aclara patents. However, Aclara could assert other patent
infringement claims against us in the future in alternative dispute resolution
proceedings established under our settlement agreement. If we are found to be
infringing any valid patent claims asserted by Aclara in alternative dispute
resolution proceedings, we may be prohibited from selling our products before
we obtain a license, which, if available at all, may require us to pay
substantial royalties.

We may need to initiate lawsuits to protect or enforce our patents, which would
be expensive and, if we lose, may cause us to lose some of our intellectual
property rights, which would reduce our ability to compete in the
market.

We rely on patents to protect a large part of our intellectual property
and our competitive position. In order to protect or enforce our patent rights,
we may initiate patent litigation against third parties, such as the patent
infringement suit against Aclara that was settled, and our recent patent
infringement suit against Molecular Devices Corporation, that are described
under Note 5 of Part I  Item 1. Financial Statements. These lawsuits could
be expensive, take significant time, and could divert managements attention
from other business concerns. They would put our patents at risk of being
invalidated or interpreted narrowly and our patent applications at risk of not
issuing. We may also provoke these third parties to assert claims against us.
Patent law relating to the scope of claims in the technology fields in which we
operate is still evolving and, consequently, patent positions in our industry
are generally uncertain. We cannot assure you that we will prevail in any of
these suits or that the damages or other remedies awarded, if any, will be
commercially valuable. During the course of these suits, there may be public
announcements of the results of hearings, motions and other interim proceedings
or developments in the litigation. If securities analysts or investors perceive
any of these results to be negative, it could cause our stock to decline.

The rights we rely upon to protect our intellectual property underlying our
products may not be adequate, which could enable third parties to use our
technology and would reduce our ability to compete in the
market.

In addition to patents, we rely on a combination of trade secrets,
copyright and trademark laws, nondisclosure agreements and other contractual
provisions and technical measures to protect our intellectual property rights.
Nevertheless, these measures may not be adequate to safeguard the technology
underlying our products. If they do not protect our rights, third parties could
use our technology, and our ability to compete in the market would be reduced.
In addition, employees, consultants and others who participate in the
development of our products may breach their agreements with us regarding our
intellectual property, and we may not have adequate remedies for the breach. We
also may not be able to effectively protect our intellectual property rights in
some foreign countries. For a variety of reasons, we may decide not to file for
patent, copyright or trademark protection outside of the United States. We also
realize that our trade secrets may become known through other means not
currently foreseen by us. Notwithstanding our efforts to protect our
intellectual property, our competitors may independently develop similar or
alternative technologies or products that are equal or superior to our
technology and products without infringing on any of our intellectual property
rights or design around our proprietary technologies.

We rely heavily on Agilent to manufacture, market and distribute the Agilent
2100 Bioanalyzer. If Agilent fails to perform under our agreement or
successfully commercialize our collaborative products, our revenue from the
Agilent 2100 Bioanalyzer may not be material and we may lose the development
funding we currently receive from Agilent.

Agilent manufactures, markets and distributes the Agilent 2100 Bioanalyzer
under an agreement we entered into in May 1998. We also rely on Agilent for
significant financial and technical contributions in the development of
products covered by the agreement. Our ability to develop, manufacture and
market these products successfully depends significantly on Agilents
performance under this agreement. Sales of new and innovative instrumentation
such as the Agilent 2100 Bioanalyzer involve a long sales cycle, requiring
customer training and demonstration periods. Although sales of the Agilent 2100
Bioanalyzer increased in 2001, we cannot predict whether this trend will
continue at its current pace, if at all. If Agilent experiences manufacturing
or distribution difficulties, does not actively market the Agilent 2100
Bioanalyzer, or does not otherwise perform under this agreement, our revenue
from the Agilent 2100 Bioanalyzer may not be material. In addition,
we have notified Agilent of our election to terminate the exclusive
collaboration portion of the agreement between the companies as of
May 2003, and Agilent may terminate the agreement at their discretion
at any time. If we do not negotiate a new agreement with Agilent and
the collaboration terminates in May 2003 as provided under the
current agreement, we would cease to receive development funding from
Agilent for new products. Furthermore, the revenue we receive from
Agilent for existing collaboration products may grow more slowly or
decline.

Agilent may compete with us if our collaboration terminates after May 2003,
which could reduce the potential revenue from our independent product
sales.

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Under the terms of our agreement with Agilent, if they, or we, terminate
our agreement after May 2003, we will grant to Agilent a non-exclusive license
to our LabChip technologies as then developed for use in the research products
field. Consequently, there is the possibility that we may experience
competition from Agilent after May 2003, which would reduce our ability to sell
products independently or through other commercial partners. We
notified Agilent in May 2002 of our election to
terminate the exclusive collaboration portion of the agreement
between the companies as of May 2003. This will trigger the
license grant described above and the attendant risks of competition
unless we negotiate a different agreement with Agilent in the
interim.

We have limited experience in manufacturing our products and may encounter
manufacturing problems or delays, which could result in lost
revenue.

Although Agilent manufactures the Agilent 2100 Bioanalyzer, we manufacture
the chips used in this instrument and also currently manufacture instruments
and sipper chips for our high throughput systems. We currently have limited
manufacturing capacity for our LabChip system products and experience
variability in manufacturing yields for chips. If we fail to deliver chips and
high throughput screening products in a timely manner, our relationships with
our customers could be seriously harmed, and revenue would decline. We
currently have one manufacturing location in Mountain View, California. The
actual number of chips we are able to sell or use depends in part upon the
manufacturing yields for these chips. We have only recently begun to
manufacture significant numbers of sipper chips and are continuing to develop
our manufacturing procedures for these chips. In order to offer sipper chips
with more than four capillaries for high throughput applications, we will need
to continue to achieve consistently high yields in this process. We cannot
assure you that manufacturing or quality problems will not arise as we attempt
to scale-up our production of chips or that we can scale-up manufacturing in a
timely manner or at commercially reasonable costs. If we are unable to
consistently manufacture sipper chips or chips for the Agilent 2100 Bioanalyzer
on a timely basis because of these or other factors, our product sales will
decline. We are currently manufacturing high throughput instruments in-house
and in limited volumes. If demand for our high throughput instruments
increases, we will either need to expand our in-house manufacturing
capabilities or outsource to Agilent or other manufacturers. Our
ability to scale-up manufacturing may be compromised by uncertainty
regarding the volume of chips for the Agilent 2100 Bioanalyzer that
we will need to supply to Agilent in the future. If our exclusive
collaboration with Agilent terminates in May 2003 pursuant to the
notice we have delivered to Agilent, then Agilent will have the
option to manufacture chips itself rather than continue to receive
its supply of chips from Caliper. We are currently engaged in
negotiations with Agilent on this and other topics, but until such an
agreement is reached or we learn Agilent's intentions regarding chip
manufacture, we will face uncertainty regarding future demand for
these chips from our manufacturing operations.

We are dependent on a sole-source supplier for our glass and if we are unable
to buy this component on a timely basis, we will not be able to deliver our
products to customers.

We currently purchase a key component for our chips from a sole-source
supplier located in Germany. Although we keep surplus inventory in our Mountain
View manufacturing facility, if we are unable to replenish this component on a
timely basis, we will not be able to deliver our chips to our customers which
would harm our business.

Our business operations may be adversely affected by the California energy
crisis.

Our principal facilities are located in the Silicon Valley in Northern
California. Last year California experienced an energy crisis that has resulted
in disruptions in power supply and increases in utility costs to consumers and
business throughout the State. Should the energy crisis continue, together with
many other Silicon Valley companies, we may experience power interruptions and
shortages and be subject to significantly higher costs of energy. Although, we
have not experienced any material disruption to our business to date, if the
energy crisis resumes and power interruptions or shortages occur in the future,
they may adversely affect our business. Any material increase in energy costs
may also adversely affect our financial results.

If a natural disaster strikes our manufacturing facility we would be unable to
manufacture our products for a substantial amount of time and we would
experience lost revenue.

We rely on a single manufacturing location to produce our chips and high
throughput systems, and have no alternative facilities. The facility and some
pieces of manufacturing equipment are difficult to replace and could require
substantial replacement lead-time. Our manufacturing facility may be affected
by natural disasters such as earthquakes and floods. Earthquakes are of
particular significance since the manufacturing facility is located in Mountain
View, California, an earthquake-prone area. In the event our existing
manufacturing facility or equipment is affected by man-made or natural
disasters, we would be unable to manufacture products for sale, meet customer
demands or sales projections. If our manufacturing operations were curtailed or
ceased, it would harm our business.

Because a small number of customers and Agilent have accounted for, and are
likely to continue to account for, a substantial portion of our revenue, our
revenue could decline due to the loss of one of these customers or the
termination of our agreement with Agilent.

Historically we have had very few customers and one commercial partner,
Agilent, from which we have derived the majority of our revenue and, if we were
to lose any one of these, our revenue would decrease substantially. For the
quarter ended March 31, 2002,

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Agilent, Amphora and one commercial customer accounted for 67% of our
total revenue. Agilent, our Technology Access Program customers, Amphora and
our initial licensing of the Ramsey family of patents to Aclara in connection
with our litigation settlement with them, accounted for 93% of our total
revenue for the year ended December 31, 2001. Agilent and three customers
accounted for 90% of total revenue for the year ended December 31, 2000.
Agilent and four customers accounted for 88% of total revenue in
1999. We have notified Agilent of our election to terminate the
exclusive collaboration portion of the agreement between the
companies as of May 2003. If we do not negotiate a new agreement
with Agilent and the collaboration terminates in May 2003 as provided
under the current agreement, we would cease to receive development
funding from Agilent for new products. Furthermore, the revenue we
receive from Agilent for existing collaboration products may grow
more slowly or decline if Agilent stops purchasing chips from Caliper
or reduces its efforts to commercialize collaboration products.

We have reached the final contract year for some of our Technology Access
Program agreements.

The third and final year of our Technology Access Program agreement with
Amgen began on January 1, 2001 and was amended for a fourth year in December
2001. In addition, the third and final year of our Technology Access Program
agreement with Eli Lilly began on August 12, 2001. Although we believe that
these customers will continue to use LabChip products and services, we may not
derive significant revenue from them in the future.

Failure to raise additional capital or generate the significant capital
necessary to expand our operations and invest in new products could reduce our
ability to compete and result in lower revenue.

We anticipate that our existing capital resources will enable us to
maintain currently planned operations at least through the year 2002. However,
we premise this expectation on our current operating plan, which may change as
a result of many factors. Consequently, we may need additional funding sooner
than anticipated. Our inability to raise capital would seriously harm our
business and product development efforts. In addition, we may choose to raise
additional capital due to market conditions or strategic considerations even if
we believe we have sufficient funds for our current or future operating plans.
To the extent that additional capital is raised through the sale of equity or
convertible debt securities, the issuance of these securities could result in
dilution to our stockholders.

We currently have no credit facility or committed sources of capital other
than an equipment lease line with $1.5 million unused and available as of March
31, 2002. To the extent operating and capital resources are insufficient to
meet future requirements, we will have to raise additional funds to continue
the development and commercialization of our technologies. These funds may not
be available on favorable terms, or at all. If adequate funds are not available
on attractive terms, we may be required to curtail operations significantly or
to obtain funds by entering into financing, supply or collaboration agreements
on unattractive terms.

We depend on our key personnel, the loss of whom would impair our ability to
compete.

We are highly dependent on the principal members of our management and
scientific staff. The loss of services of any of these persons could seriously
harm our product development and commercialization efforts. In addition,
research, product development and commercialization will require additional
skilled personnel in areas such as chemistry and biology, software engineering
and electronic engineering. Our business is located in Silicon Valley,
California, where demand for personnel with these skills is extremely high and
is likely to remain high. As a result, competition for and retention of
personnel, particularly for employees with technical expertise, is intense and
the turnover rate for these people is high. If we are unable to hire, train and
retain a sufficient number of qualified employees, our ability to conduct and
expand our business could be seriously reduced. The inability to retain and
hire qualified personnel could also hinder the planned expansion of our
business.

Potential acquisitions may have unexpected consequences or impose additional
costs on us.

Our business is dependent upon growth in the market for microfluidic
products and our ability to enhance our existing products and introduce new
products on a timely basis. One of the ways we may address the need to develop
new products is through acquisitions of complementary businesses and
technologies. From time to time, we may consider and evaluate potential
acquisitions or business combinations, which may include a possible merger or
consolidation of our business with another entity. We may engage in discussions
relating to these types of transactions in the future. Acquisitions involve
numerous risks, including the following:



| |  |  | difficulties in integration of the operations, technologies, and products of the acquired companies
| | - |  | ---------------------------------------------------------------------------------------------------
|
| |  |  | the risk of diverting managements attention from normal daily operations of the business          

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| |  |  | accounting consequences, including charges for in-process research
and development expenses, resulting in variability in our quarterly
earnings      
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | potential difficulties in completing projects associated with
purchased in-process research and development                                          
|
| |  |  | risks of entering markets in which we have no or limited direct prior
experience and where competitors in such markets have stronger market
positions
|
| |  |  | the potential loss of key employees of the acquired company                                                                                          
|
| |  |  | the assumption of unforeseen liabilities of the acquired company                                                                                     

We cannot assure you that future acquisitions or business combinations in
which we are involved, if any, will be successful and will not adversely affect
our financial condition or results of operations. Failure to manage growth
effectively and successfully integrate acquisitions we make could harm our
business and operating results.

Risks Related to Owning Our Common Stock

Our stock price is extremely volatile, and you could lose a substantial portion
of your investment.

Our stock has been trading on the Nasdaq National Market only since
mid-December 1999. We initially offered our common stock to the public at
$16.00 per share. Since then our stock price has been extremely volatile and
has ranged, through May 10, 2002, from a high of approximately $202.00 per
share on March 2, 2000 to a low of $7.26 per share on May 8, 2002. Our stock
price may drop substantially following an investment in our common stock. We
expect that our stock price will remain volatile as a result of a number of
factors, including:



| |  |  | announcements by analysts regarding their assessment of Caliper and its prospects               
| | - |  | ------------------------------------------------------------------------------------------------
|
| |  |  | announcements of our financial results, particularly if they differ from investors expectations
|
| |  |  | general market volatility for technology stocks                                                 

We have been sued, and are at risk of future securities class action litigation.

In the Spring and Summer of 2001, class action lawsuits were filed against
certain leading investment banks and over 300 companies that did public
offerings during the prior several years, including lawsuits against Caliper
and certain of its officers and directors as described under Note 5 of Part I
 Item 1. Financial Statements. This and other securities litigation could
result in potential liability, cause us to incur litigation costs and divert
managements attention and resources, any of which could harm our business. In
addition, announcements of future lawsuits of this or some other nature, and
announcements of events occurring during the course of the current and any
future lawsuits, could cause our stock price to drop.

Provisions of our charter documents and Delaware law may inhibit a takeover,
which could limit the price investors might be willing to pay in the future for
our common stock.

Provisions in our certificate of incorporation and bylaws may have the
effect of delaying or preventing an acquisition, merger in which we are not the
surviving company or changes in our management. In addition, because we are
incorporated in Delaware, we are governed by the provisions of Section 203 of
the Delaware General Corporation Law. These provisions may prohibit large
stockholders, in particular those owning 15% or more of the outstanding voting
stock, from consummating a merger or combination including us. These provisions
could limit the price that investors might be willing to pay in the future for
our common stock.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no changes to the quantitative and qualitative disclosures
on market risk from the Annual Report on Form 10-K for the year ended December 31, 2001 filed by Caliper Technologies Corp.

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PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

Commencing on
June 7, 2001, Caliper and three of its officers and directors
(David V. Milligan, Daniel L. Kisner and James L. Knighton) were
named as defendants in three securities class action lawsuits filed
in the United States District Court for the Southern District of New
York. The cases have been consolidated under the caption In re
Caliper Technologies Corp. Initial Public Offering Securities
Litigation, 01 Civ. 5072 (SAS) (GBD). Similar complaints were
filed in the same Court against hundreds of other public companies
that conducted IPOs of their common stock since the late 1990s (the
IPO Lawsuits). On August 8, 2001, the IPO Lawsuits
were consolidated for pretrial purposes before United States Judge
Shira Scheindlin of the Southern District of New York. Together,
those cases are denominated In re Initial Public Offering
Securities Litigation, 21 MC 92 (SAS). On April 19, 2002, a
Consolidated Amended Complaint was filed alleging claims against
Caliper and the individual defendants under Sections 11 and 15 of the
Securities Act of 1933, and under Section 10(b) and 20(a) of the
Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated
thereunder. The Consolidated Amended Complaint also names certain
underwriters of Calipers December 1999 initial public offering of
common stock. The Complaint alleges that these underwriters charged
excessive, undisclosed commissions to investors and entered into
improper agreements with investors relating to aftermarket
transactions. The Complaint seeks an unspecified amount of money
damages. Based on information currently available to Caliper, Caliper
believes that the claims alleged against Caliper and its officers and
directors are without merit. Caliper intends to defend this case vigorously.

On April 16, 2002, Caliper filed a lawsuit against Molecular Devices
Corporation in the United States District Court for the Northern District of
California. In that case, Caliper Technologies Corp. v. Molecular Devices
Corporation, No. C-02-1837 (N.D. Cal.), Caliper asserts that Molecule Devices
IMAP  products infringe one or more claims of United States
Patent No. 6,287,774, which Caliper owns. Calipers complaint seeks both
injunctive relief precluding further infringement of the patent and damages.
The answer to the Complaint was filed on May 8 and asserts a counterclaim
seeking a declaratory judgment that the patent is not infringed and is invalid.
Caliper believes the counterclaim to be without merit. The litigation is
still at an early stage, and no trial date has yet been set by the court.




ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.




ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.




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

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Not Applicable.




ITEM 5. OTHER INFORMATION

In May 2002, we announced that in July 2002, we will undergo a significant
change in our management. Under the new management structure, our Chief
Executive Officer, Dr. Daniel Kisner, will become our Chairman of the Board,
replacing Dr. David Milligan in this capacity. Dr. Milligan will become our
Vice Chairman of the Board. Dr. Michael Knapp, currently our Vice President of
Corporate Development, will become our Chief Executive Officer, replacing Dr.
Kisner in this capacity. Mr. James L. Knighton, currently our Chief Financial
Officer, will become our President and Chief Operating Officer.

We also announced that we anticipate that, following a period of several
months of Dr. Knapp and Mr. Knighton serving in their new capacities, our Board
of Directors will elect each of Dr. Knapp and Mr. Knighton as members of the
Board.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibits
|--- |  | --------

|        |  |                                                               |  |  |  | 
|------- |  | ------------------------------------------------------------- |  |  |  | 
|Exhibit |  |                                                               |  |  |  | 
|Number  |  | Description of document                                       |  |  |  | 
|        |  |                                                               |  |  |  | 
|3.1(1)  |  | Amended and Restated Certificate of Incorporation of Caliper.
|3.2(2)  |  | Bylaws of Caliper.                                           
|4.1     |  | Reference is made to Exhibits 3.1 and 3.2.                   
|4.2(3)  |  | Specimen Stock Certificate.                                  



|(1) |  | Previously filed as Exhibit 3.3 to our Registration Statement on Form
S-1, Registration No. 333-88827.              
|--- |  | --------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Previously filed as Exhibit 3.4 to our Registration Statement on Form
S-1, Registration No. 333-88827.              
|   
|(3) |  | Previously filed as the like-numbered Exhibit to our Registration
Statement on Form S-1, Registration No. 333-88827.
|   
|(b) |  | Reports on Form 8-K                                                                                                 
|   
|    |  | We did not file a Current Report on Form 8-K during the quarter ended
March 31, 2002.                               

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|             |                                                                        |                      
|------------ | ---------------------------------------------------------------------- | ---------------------
|             | CALIPER TECHNOLOGIES CORP.                                            
|            
|May 15, 2002 | By:                                                                    | /s/ JAMES L. KNIGHTON
|             |                                                                       
|             | James L. Knighton
Executive Vice President and Chief Financial Officer

| |                                                                              |                           
| | ---------------------------------------------------------------------------- | --------------------------
| | By:                                                                          | /s/ ANTHONY T. HENDRICKSON
| |                                                                             
| | Anthony T. Hendrickson
Corporate Controller and Principal Accounting Officer

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EXHIBIT INDEX

|       |  |                                                              
|------ |  | -------------------------------------------------------------
|3.1(1) |  | Amended and Restated Certificate of Incorporation of Caliper.
|3.2(2) |  | Bylaws of Caliper.                                           
|4.1    |  | Reference is made to Exhibits 3.1 and 3.2.                   
|4.2(3) |  | Specimen Stock Certificate.                                  



|(1) |  | Previously filed as Exhibit 3.3 to our Registration Statement on Form S-1,
Registration No. 333-88827.              
|--- |  | --------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Previously filed as Exhibit 3.4 to our Registration Statement on Form
S-1, Registration No. 333-88827.              
|   
|(3) |  | Previously filed as the like-numbered Exhibit to our Registration Statement
on Form S-1, Registration No. 333-88827.

22