10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File Number: 001-34753

GenMark Diagnostics, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-2053069
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5964 La Place Court, Suite 100, Carlsbad, California	92008-8829
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: 760-448-4300

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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of outstanding shares of the registrant’s common stock on April 29, 2012 was 21,134,078.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
(Unaudited)
Item 1.	Financial Statements		1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		15
Item 4.	Controls and Procedures		16
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		18
Item 1A.	Risk Factors		18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		18
Item 3.	Defaults Upon Senior Securities		18
Item 4.	Safety Disclosures		18
Item 5.	Other Information		18
Item 6.	Exhibits		18

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GENMARK DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

		December 31, 2011			December 31, 2011
	As of     March 31, 2012    (Unaudited)			As of December 31, 2011
Current assets
Cash and cash equivalents	$	23,801		$	25,320
Short-term investments		—			5,000
Accounts receivable, net of allowance of $70 and $98 at March 31, 2012 and December 31, 2011, respectively		1,055			1,098
Inventories		2,094			2,168
Other current assets		135			322
Total current assets		27,085			33,908
Property and equipment, net		3,417			2,836
Intangible assets, net		1,722			1,362
Other long-term assets		102			80
Total assets	$	32,326		$	38,186
Current liabilities
Accounts payable	$	1,698		$	1,201
Accrued compensation		1,107			1,521
Current portion of long -term debt		1,015			1,000
Other current liabilities		1,562			2,659
Total current liabilities		5,382			6,381
Long-term liabilities
Long-term debt		410			583
Other non-current liabilities		726			588
Total liabilities	$	6,518		$	7,552
Stockholders’ equity
Preferred stock, $0.0001 par value; 5,000 authorized, none issued		—			—
Common stock, $0.0001 par value; 100,000 authorized; 21,137 and 20,478 issued and outstanding as of March 31, 2012 and December 31, 2011, respectively		2			2
Additional paid-in capital		200,263			199,531
Accumulated deficit		(174,021	)		(168,463	)
Accumulated other comprehensive loss		(436	)		(436	)
Total stockholders’ equity		25,808			30,634
Total liabilities and stockholders’ equity	$	32,326		$	38,186

See accompanying notes to unaudited condensed consolidated financial statements.

1

GENMARK DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,
	2012			2011
Product Revenue	$	2,120		$	693
License and other revenue		39			65
Total revenue		2,159			758
Cost of sales		1,687			1,501
Gross profit (loss)		472			(743	)
Operating expenses
Research and development		1,949			2,564
Sales and marketing		1,418			1,219
General and administrative		2,587			2,123
Total operating expenses		5,954			5,906
Loss from operations		(5,482	)		(6,649	)
Other (expense) income, net		(44	)		18
Loss before income taxes		(5,526	)		(6,631	)
Provision for income taxes		(32	)		(11	)
Net loss	$	(5,558	)	$	(6,642	)
Net loss per share, basic and diluted	$	(0.28	)	$	(0.56	)
Weighted average number of shares outstanding		20,094			11,771
Condensed consolidated statements of comprehensive loss for the three months ended March 31, 2012 and 2011
Net loss	$	(5,558	)	$	(6,642	)
Foreign currency translation adjustment		—			—
Comprehensive loss	$	(5,558	)	$	(6,642	)

See accompanying notes to unaudited condensed consolidated financial statements.

2

GENMARK DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three months Ended March 31,
	2012			2011
Cash flows from operating activities:
Net loss	$	(5,558	)	$	(6,642	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		264			289
Share-based compensation		506			475
Change in allowance for doubtful accounts		(28	)		(48	)
Provision for excess and obsolete inventory		(636	)		(1	)
Changes in operating assets and liabilities:
Trade accounts receivable		72			(37	)
Inventories		757			26
Other current assets		165			1,811
Accounts payable		(112	)		668
Accrued compensation		(188	)		(152	)
Accrued and other liabilities		(738	)		521
Net cash used in operating activities		(5,496	)		(3,090	)
Investing activities:
Payments for intellectual property licenses		(739	)		—
Purchases of property and equipment		(17	)		(185	)
Proceeds of sale of investments		5,000			—
Net cash provided by (used in) investing activities		4,244			(185	)
Financing activities:
Proceeds from borrowings		—			2,000
Principal repayment of long-term debt		(267	)		—
Net cash provided by (used in) financing activities		(267	)		2,000
Net decrease in cash and cash equivalents		(1,519	)		(1,275	)
Cash and cash equivalents at beginning of period		25,320			18,329
Cash and cash equivalents at end of period	$	23,801		$	17,054
Supplementary schedule of non-cash transactions:
Property and equipment purchased with capital lease	$	109		$	—
Transfer of systems from property and equipment into inventory		47			—
Property and equipment costs incurred but not paid included in accounts payable and other current liabilities		728			161

See accompanying notes to unaudited condensed consolidated financial statements.

3

Genmark Diagnostics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(unaudited)

1. Organization and basis of presentation

Genmark Diagnostics, Inc. (the “Company” or “GenMark”) is a molecular diagnostics company focused on developing and commercializing the Company’s proprietary eSensor technology. On February 12, 2010, the Company was established to serve as the parent company of Osmetech plc (“Osmetech”) upon a corporate reorganization and initial public offering (“IPO”). On June 3, 2010, the Company completed an IPO for 4,600,000 shares. Immediately prior to the completion of the IPO, the Company underwent a corporate reorganization whereby the ordinary shares of Osmetech were exchanged by its shareholders for the common stock of the Company on a 230 for 1 basis.

As the reorganization is deemed to be a transaction under common control, GenMark accounted for the reorganization in a manner similar to a pooling-of-interests, meaning:

(i) assets and liabilities were carried over at their respective carrying values;

(ii) common stock was carried over at the nominal value of the shares issued by GenMark;

(iii) additional paid-in capital represents the difference between the nominal value of the shares issued by GenMark, and the total of the additional paid-in capital and nominal value of Osmetech’s shares cancelled pursuant to the described reorganization; and

(iv) the accumulated deficit represents the aggregate of the accumulated deficit of Osmetech and the Company.

Once the reorganization became effective, all stock options granted under the Osmetech plc 2003 U.S. Equity Compensation Plan, Long Term Incentive Awards and all warrants issued were exchanged for options and warrants exercisable for the common stock of the Company.

In these consolidated financial statements, the Company means Osmetech when referring to periods prior to the corporate reorganization and IPO.

The accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses from operations since its inception and has an accumulated deficit of $174.0 million at March 31, 2012. Cash and cash equivalents at March 31, 2012 were $23.8 million.

Management expects operating losses to continue through the foreseeable future until the Company has expanded its product offerings and increased its product revenues to an extent that covers the fixed cost base of the business. The Company’s management has prepared cash flow forecasts which indicate, based on the current cash resources available and the availability of unutilized credit facilities, that the Company has sufficient capital to fund its operations for at least the next twelve months.

The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for audited financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The information presented in the condensed consolidated financial statements and related footnotes at March 31, 2012, and for the three months ended March 31, 2012 and 2011, is unaudited and the condensed consolidated balance sheet amounts and related footnotes at December 31, 2011 have been derived from our audited financial statements. For further information, refer to the consolidated financial statements and accompanying footnotes included in our annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 21, 2012.

Segment Information

The Company operates in one business segment, which is the development and commercialization of molecular tests based on its proprietary eSensor detection technology. Substantially all of the Company’s operations and assets are in the United States of America.

Principles of Consolidation-The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

4

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

In May 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-04, Amendment to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”), which amended Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement. The objective of this guidance is to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Standards. The guidance further explains how to measure fair value, but does not require additional fair value measurements. ASU 2011-04 is to be applied prospectively for fiscal years and interim periods within those years beginning after December 15, 2011. The Company’s adoption of this guidance effective January 1, 2012 resulted in no additional disclosures in the notes to the Company’s condensed consolidated financial statements, but did not have a material quantitative effect.

Fair Value of Financial Instruments

Assets and liabilities are classified based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of financial instruments such as cash equivalents, accounts receivable, prepaid and other current assets, accounts payable and other current liabilities approximate the related fair values due to the short-term maturities of these instruments. The Company reviews the fair value hierarchy on a quarterly basis. Changes in the observations or valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

The Company’s cash equivalents and short-term investments include money market funds and certificates of deposit. When available, the Company uses quoted market prices to determine fair value and classify such items as Level 1. If quoted market prices are not available, prices are determined using prices for recently traded financial instruments with similar underlying terms, such as interest rates and yield curves that are observable at commonly quoted intervals. The Company classifies such items as Level 2.

Cash and cash equivalents and short-term investments

Cash and cash equivalents consist of cash on deposit with banks, money market instruments and certificates of deposit with maturities of three months or less at the date of purchase. Short-term investments consist of a certificate of deposit that matures in greater than three months, but less than one year from the date of purchase. The carrying amounts reported in the balance sheets for cash, cash equivalents and short-term investments are stated at their fair market value.

Concentration of Risk

The Company had sales to one customer representing approximately 39% of total revenues for the three months ended March 31, 2012. Also, the Company’s XT-8 system is manufactured by a limited number of suppliers that specialize in contract design and manufacturing of electronic and electromechanical devices for medical use.

Product Shipment Costs

Product shipment costs are included in sales and marketing expense in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. Shipping and handling costs were $38,000 and $28,000 for the three months ended March 31, 2012 and 2011, respectively.

Product Warranties

The Company generally offers a one-year warranty for its systems sold to customers and provides for the estimated cost of the product warranty at the time the system sale is recognized. Factors that affect the Company’s warranty reserves include the number of units sold, historical and anticipated rates of warranty repairs and the cost per repair. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary.

Impairment of Long-Lived Assets

The Company assesses the recoverability of long-lived assets, including intangible assets, by periodically evaluating the carrying value whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If impairment is indicated, the Company writes down the carrying value of the asset to its estimated fair value. This fair value is primarily determined based on estimated undiscounted cash flows.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market and include direct labor, materials, and manufacturing overhead. The Company periodically reviews inventory for evidence of slow-moving or obsolete parts, and writes inventory down to market. This write down is based on management’s reviews of inventories on hand, compared to estimated future usage and sales, shelf-life assumptions, and assumptions about the likelihood of obsolescence. If actual market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required. Inventory impairment charges establish a new cost basis for inventory and charges are not reversed subsequently to income, even if circumstances later suggest that increased carrying amounts are recoverable.

Property and Equipment-net

Property, equipment and leasehold improvements are recorded at cost and depreciated using the straight-line method over the assets’ estimated useful lives, which are:

Machinery and laboratory equipment	—	3 – 5 years
Instruments	—	4 years
Office equipment	—	5 years
Leasehold improvements	—	over the shorter of the remaining life of the lease or the useful economic life of the asset

Effective January 1, 2012, the Company changed its estimated useful life for instruments from three to four years and estimated useful life of office equipment from between two and four years to five years.

Property and equipment include diagnostic instruments used for sales demonstrations or placed with customers under several types of arrangements, including performance evaluation period programs (PEPs), and rentals. PEPs are placed with customers for evaluation periods of up to six months. The customer is required to purchase a minimum amount of reagents and at the end of the evaluation period must purchase, rent, or return the instrument. Maintenance and repair costs are expensed as incurred.

Income Taxes

Current income tax expense is the amount of income taxes expected to be payable for the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax bases of assets and liabilities. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. A full valuation allowance has been recorded against the Company’s deferred tax assets due to the uncertainty surrounding the Company’s ability to utilize these assets in the future. The Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards prescribed by the authoritative guidance on income taxes. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of income tax expense.

5

Corporate Reorganization

During the quarter ended June 30, 2011, the Company underwent a corporate reorganization (the “Reorganization”) intended to simplify its U.S. entity structure. As part of the Reorganization, Osmetech Technologies, Inc. merged into Clinical Micro Sensors, Inc. (“CMS”), with CMS surviving. Additionally, Osmetech plc converted to a U.K. limited company for U.K. legal and tax purposes, and made an entity classification election to be treated as an entity disregarded from GenMark Diagnostics, Inc. for U.S. federal income tax purposes. It is anticipated that the Reorganization will not trigger any material U.S. federal or U.K. income tax expense. Additionally, it is anticipated that the post-Reorganization structure will allow GenMark Diagnostics, Inc. to elect to file a consolidated U.S. federal income tax return with its remaining U.S. subsidiaries, CMS and Osmetech, Inc.

2. Share-Based Compensation

The Company recognizes share-based compensation expense related to share options and restricted stock issued to employees, directors and consultants in exchange for services. The compensation expense is based on the fair value of the awards, which are determined by utilizing various assumptions regarding the underlying attributes of the options and shares. The estimated fair value of options granted and restricted stock, net of forfeitures expected to occur during the vesting period, is amortized as compensation expense on a straight line basis over the period the vesting occurs. The share-based compensation expense is recorded in cost of sales, sales and marketing, research and development and general and administrative expenses based on the employee’s or consultant’s respective function. The option expense is derived from the Black-Scholes Option Pricing Model that uses several judgment based variables to calculate the expense. The inputs include the expected life of the option or warrant, the expected volatility and other factors. The compensation expense related to the restricted stock is calculated as the difference between the fair market value of the stock on the date of grant, less the cost to acquire the shares, which is $0.0001 per share, and is recognized over the vesting period of the award.

On June 3, 2010, the Company exchanged all of the outstanding options under the Osmetech plc 2003 U.S. Equity Compensation Plan (the “U.S. Plan”) for options under the 2010 Equity Incentive Plan (the “Plan”). The options were exchanged using an exchange ratio of 230 options to purchase shares of Osmetech plc to one share of the Company and was accounted for as a modification of the share-based payment arrangement. There was no additional compensation cost recorded related to the exchange as there was no change in the economic value of the options exchanged.

Employee participation in the Plan is at the discretion of the compensation committee or senior management of the Company. All options granted since June 3, 2010 are exercisable at a price equal to the average closing quoted market price of the Company’s shares on the NASDAQ on the date of grant. Options granted prior to June 3, 2010 under the Osmetech plc 2003 U.S. Equity Compensation Plan were exercisable at a price equal to the average closing quoted market price of the Osmetech plc’s shares on the Alternative Investment Market of the London Stock Exchange on the date of the grant as adjusted for the exchange ratio to the Company’s shares as described above. Options generally vest between 1 and 4 years.

Options are generally exercisable for a period up to 10 years after grant and are forfeited if the employee leaves the Company before the options vest. Employees generally have 90 days after leaving the Company to exercise vested options. As of March 31, 2012, there were no shares available for future grant of awards under the Plan. Restricted stock grants reduce the amount of stock options available for grant under the 2010 Plan and are excluded from the table below.

The following table summarizes stock option activity during the three months ended March 31, 2012. There was no warrant activity for the three months ended March 31, 2012.

	Number of Share options			Weighted average exercise price
Outstanding at December 31, 2011		1,598,894		$	5.38
Granted		169,517		$	4.31
Exercised		—			—
Cancelled		(66,517	)	$	(5.05	)
Outstanding at March 31, 2012		1,701,894		$	5.29
Exercisable at March 31, 2012		679,812		$	6.12

As of March 31, 2012, there were 1,518,591 options that are vested or expected to vest and these options have a remaining weighted average contractual term of 8.58 years, and an aggregate intrinsic value of $30,745.

Valuation of Share-Based Awards—The Black-Scholes option pricing model was used for estimating the grant date fair value of stock options granted during the three months ended March 31, 2012 with the following assumptions:

Expected volatility (%)	70.00
Expected life (years)	5.78
Risk free rate (%)	1.06
Expected dividend yield (%)	0.00
Estimated forfeitures (%)	10.00

6

The Company’s non-vested restricted share award (“RSA”) activity for the quarter ended March 31, 2012 is as follows:

Restricted Stock Awards	Number of shares			Weighted average Grant Date Fair Value
Non-vested at December 31, 2011		403,062		$	4.22
Granted		684,721		$	4.16
Vested		(40,419	)	$	(4.19	)
Cancelled or expired		(20,537	)	$	(4.38	)
Non-vested at March 31, 2012		1,026,827		$	4.18

As of March 31, 2012, there was $3.3 million of unrecognized compensation cost related to RSAs. That cost is expected to be recognized over a weighted average-period of 3.39 years. The total fair value of restricted shares vested during the quarter ended March 31, 2012 and 2011 was $168,000 and $318,000, respectively.

RSAs may be granted at the discretion of the Board of Directors under the Equity Incentive Plan in connection with the hiring or retention of personnel and are subject to certain conditions. Restrictions expire at certain dates after the grant date in accordance with specific provisions in the applicable agreement. During the quarter ended March 31, 2012, the Company awarded 684,721 shares of restricted stock, which had a fair value at the date of grant ranging from $4.14 to $4.38 per share. During the quarter ended March 31, 2011, the Company awarded 130,800 shares of restricted stock, which had a fair value at the date of grant ranging from $4.28 to $4.50 per share. Compensation under these restricted stock awards is charged to expense over the restriction period and amounted to $181,000 and $218,000 for the three months ended March 31, 2012 and 2011, respectively.

There was no stock compensation costs capitalized into assets as of March 31, 2012.

7

3. Net Loss per Common Share

Basic net loss per share is computed by dividing loss available to common shareholders (the numerator) by the weighted average number of common shares outstanding during the period (the denominator). Shares issued during the period and shares reacquired during the period are weighted for the portion of the period that they were outstanding, as adjusted for the effect of participating securities. The Company’s unvested restricted share awards are participating securities as they contain non-forfeiture rights to dividends. Diluted loss per share is calculated in a similar manner to basic loss per share except that the denominator is increased to include the number of additional shares that would have been outstanding if the dilutive potential shares had been issued unless the effect would be anti-dilutive. As the Company had a net loss in each of the periods presented, basic and diluted net loss per ordinary share are the same.

The computations of diluted net loss per share did not include the effects of the following securities as the inclusion of these items would have been anti-dilutive (in thousands):

	March 31,
	2012		2011
Common stock options outstanding		1,702		1,315
Warrants		88		88
Restricted Stock—unvested, issued and held in escrow		1,027		—
Restricted Stock—vested, not issued or outstanding		—		61
Total		2,817		1,464

Common Stock Warrants — During 2009, the Company issued warrants to purchase 132,475 of Osmetech’s ordinary shares with an exercise price of £4.60 per share, and warrants to purchase 88,317 of Osmetech’s ordinary shares with an exercise price of £6.90 per share to a director for services to the Company in connection with the share offering completed in 2009. Pursuant to the terms of the warrant, the warrant to purchase 132,475 was cancelled upon the closing of the IPO in June 2010. At the same time, the warrant to purchase 88,317 of Osmetech’s ordinary shares was converted to warrants to purchase 88,317 shares of the Company’s common stock at an exercise price of $9.98. These warrants were fully vested and exercisable upon issue, and shall continue to be exercisable up to and including the earlier to occur of (i) 60 days after the director leaving the Company’s board of directors (for whatever reason) and (ii) June 30, 2012.

4. Inventory-net

Inventory on hand as of March 31, 2012 and December 31, 2011 was comprised of the following (in thousands):

	2012		2011
Raw materials	$	1,028	$	1,012
Work-in-process		564		706
Finished goods		502		450
	$	2,094	$	2,168

5. Property and Equipment, net

Property and equipment was comprised of the following as of March 31, 2012 and December 31, 2011 (in thousands):

	March 31, 2012			December 31, 2011
Property and equipment—at cost:
Plant and machinery	$	2,623		$	2,539
Instruments		4,492			3,918
Office equipment		872			848
Leasehold improvements		593			583
Total property and equipment—at cost		8,580			7,888
Less accumulated depreciation		(5,163	)		(5,052	)
Net property and equipment	$	3,417		$	2,836

Depreciation expense was $224,000 and $286,000 for the three months ended March 31, 2012 and 2011, respectively.

6. Intangible assets

Intangible assets as of March 31, 2012 and December 31, 2011, respectively, comprise the following (in thousands):

	March 31, 2012							December 31, 2011
	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Licensed intellectual property	$	2,874	$	(1,152	)	$	1,722	$	2,474	$	(1,112	)	$	1,362

During the three months ended March 31, 2012, the Company acquired exclusive and non-exclusive licenses for various microfluidic technology for a license fee of $400,000 which will be amortized over a 10 year period of expected use.

Licenses have a weighted average remaining amortization period of 8.8 years as of March 31, 2012. Amortization expense for intangible assets amounted to $40,000 and $3,000 for the three months ended March 31, 2012 and 2011, respectively. Estimated future amortization expense for these licenses (assuming no impairment charges) is as follows (in thousands):

Years Ending March 31,
2013	$	199
2014		199
2015		199
2016		199
2017		195
Thereafter		731
Total	$	1,722

7. Loan payable

In March 2010, the Company entered into a loan and security agreement with Square 1 Bank, pursuant to obtaining a credit facility consisting of a revolving line of credit in the amount of up to $2 million and an equipment term loan in the amount of up to $2 million. Based upon certain financial covenants, interest on the revolving line of credit will be either (i) the greater of (a) the bank’s prime rate (3.25% as of March 31, 2012) plus 2.75%, or (b) 6%; or (ii) the greater of (a) the bank’s prime rate plus 3.75%, or (b) 7%. In addition, based upon certain financial covenants, interest on the equipment term loan will be either (i) the greater of (a) the bank’s prime rate plus 3.25%, or (b) 6.50%; or (ii) the greater of (a) the bank’s prime rate plus 4.25%, or (b) 7.50%. The revolving line matures in July 2011 and the term loan matures in July 2013. In March 2011, the loan and security agreement was amended, whereby the line of credit availability was increased to $3.0 million and the maturity was extended to July 2012. The term loan was modified to allow invoices up to 360 days to qualify to be submitted for credit extension. There were no other changes to these two loans.

8

In March 2011, an additional loan was made available under the amended loan and security agreement for up to $1.0 million to finance equipment purchases. Based upon certain financial covenants, interest on this equipment term loan will be either (i) the greater of (a) the bank’s prime rate plus 3.25%, or (b) 6.50%; or (ii) the greater of (a) the bank’s prime rate plus 4.25%, or (b) 7.50%. This term loan matures March 2014.

As of March 31, 2012, the Company had no outstanding loans on the line of credit or the 2011 equipment loan and had a balance of $1.3 million used to finance 2010 equipment purchases and tenant improvements to its Carlsbad facility on the original 2010 equipment term loan. The loan bears an interest rate of 6.5%. Interest-only payments at the rate of 6.5% were due monthly from the date of each initial equipment advance until July 12, 2011. Initial equipment advances that were then outstanding are payable in 24 equal monthly installments of principal, plus all accrued and unpaid interest, beginning on August 12, 2011 and continuing on the same day of each month thereafter through July 12, 2013.

Pursuant to the terms of the loan and security agreement, the Company is required to maintain a ratio of liquidity to bank indebtedness equal to at least 1.50 to 1.00. In addition, the loan and security agreement includes several restrictive covenants, including requirements that the Company obtains the consent of Square 1 Bank prior to entering into any change of control event unless all debt is repaid to Square 1 Bank prior to the change of control event, incurring other indebtedness or liens with respect to the Company’s property, making distributions to stockholders, making certain investments or entering into certain transactions with affiliates and other restrictions on storing inventory and equipment with third parties. The agreement also limits the amount the Company can borrow under the term loan to license genetic biomarkers to $500,000. To secure the credit facility, the Company granted Square 1 Bank a first priority security interest in its assets and intellectual property rights. The Company is currently in compliance will all ratios and covenants.

8. Lease payable

In January 2012 the Company entered into a lease agreement for office furniture totaling $136,000. Terms of the lease require an initial payment of $15,500 and fifty nine payments of $2,040 per month.

9. Fair Value of Financial Instruments

The Company’s financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The carrying amounts of accounts receivable and accounts payable are considered reasonable estimates of their fair value, due to the short maturity of these instruments.

Accounting literature provides a fair value hierarchy, which classifies fair value measurements based on the inputs used in measuring fair value. These inputs include: Level 1 defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Cash and cash equivalents: The carrying amounts reported in the balance sheets for cash and cash equivalents are stated at their fair market value. Cash and cash equivalents are classified as Level 1.

Certificates of deposit: The carrying amounts reported in the balance sheets for certificates of deposit that are reported as short-term investments are stated at their fair market value. Short-term investments are classified as Level 2.

Non-recurring measurements: The Company measures the fair value of its long-lived assets on a periodic basis when it appears that there may be requirement to do so, such as an indication of impairment.

The following table presents the Company’s hierarchy for assets measured at fair value on a recurring basis as of March 31, 2012 and December 31, 2011 (in thousands):

	March 31, 2012
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash equivalents	$	18,234	$	—	$	—	$	18,234

	December 31, 2011
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash equivalents	$	19,225	$	—	$	—	$	19,225
Certificates of deposit		—		5,000		—		5,000

10. Income taxes

The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

As of March 31, 2012, the Company has recorded a full valuation allowance against all of its net deferred tax assets due to the uncertainty surrounding the Company’s ability to utilize these assets in the future. Provision for income tax was $32,000 and $11,000 for the three months ended March 31, 2012 and 2011, respectively. Due to the Company’s losses it only records tax provision or benefit related to minimum tax payments or refunds and interest related to its uncertain tax positions.

The total amount of unrecognized tax benefits was $382,000 as of March 31, 2012 which would impact the effective tax rate if recognized. The gross liability for income taxes related to unrecognized tax benefits is included in other long-term liabilities in the Company’s condensed consolidated balance sheets.

The total balance of accrued interest related to uncertain tax positions was $133,000 as of March 31, 2012. The Company recognizes interest related to uncertain tax positions as a component of income tax expense. The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months.

The Company is subject to taxation in the U.S., the U.K. based on its legacy operations, and in various state jurisdictions. As of March 31, 2012 the Company’s tax years after 2007 are subject to examination by the U.K. tax authorities. Except for net operating losses generated in prior years carrying forward to the current year, as of March 31, 2012, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2006.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read with our unaudited condensed consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report for the three months ended March 31, 2012, as well as the audited financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2011, included in our Annual Report on Form 10-K for the year ended December 31, 2011. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements regarding future events and our future results are based on current expectations, estimates, forecasts, and projections and the beliefs and assumptions of our management including, without limitation, our expectations regarding our results of operations, sales and marketing expenses, general and administrative expenses, research and development expenses, and the sufficiency of our cash for future operations. Words such as “we expect,” “anticipate,” “target,” “project,” “believe,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “expect,” “might,” “could,” “intend,” variations of these terms or the negative of those terms and similar expressions are intended to identify these forward-looking statements. Readers are cautioned that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.

Among the important factors that could cause actual results to differ materially from those indicated by our forward-looking statements are those discussed under the heading “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2011. We do not intend to update these forward looking statements to reflect future events or circumstances.

Overview

GenMark was established to serve as the parent company of Osmetech upon a corporate reorganization in Delaware in February 2010 and had no operations prior to its initial public offering which was completed in June 2010. Immediately prior to the closing of the initial public offering, GenMark acquired all of the outstanding ordinary shares of Osmetech in a reorganization under the applicable laws of the United Kingdom. As a result of the reorganization, all of the issued ordinary shares in Osmetech were cancelled in consideration of (i) the issuance of common stock of GenMark to the former shareholders of Osmetech and (ii) the issuance of new shares in Osmetech to GenMark. Following the reorganization, Osmetech became a wholly-owned subsidiary controlled by GenMark, and the former shareholders of Osmetech held shares of GenMark. Any historical discussion of GenMark relates to Osmetech and its consolidated subsidiaries prior to the reorganization.

We are a molecular diagnostics company focused on developing and commercializing our proprietary eSensor detection technology. Our proprietary electrochemical technology enables fast, accurate and highly sensitive detection of up to 72 distinct biomarkers in a single sample. Our XT-8 system received 510(k) clearance from the FDA and is designed to support a broad range of molecular diagnostic tests with a compact and easy-to-use workstation and self-contained, disposable test cartridges. Within 30 minutes of receipt of an amplified DNA sample, our XT-8 system produces clear and accurate results. Our XT-8 system supports between one and three analyzers. Each analyzer holds up to eight independent test cartridges, resulting in the XT-8 system supporting up to 24 test cartridges, each of which can be run independently, resulting in a convenient and flexible workflow for our target customers, which are hospitals and reference laboratories. As of March 31, 2012, we had an installed base of 189 analyzers, or placements, with our customers.

We have developed six tests for use with our XT-8 system and expect to expand this test menu by introducing new tests annually. Three of our diagnostic tests have received FDA clearance, including our Cystic Fibrosis Genotyping Test, which detects pre-conception risks of cystic fibrosis, our Warfarin Sensitivity Test, which determines an individual’s ability to metabolize the oral anticoagulant warfarin, and our Thrombophilia Risk Test, which detects an individual’s increased risk of blood clots. Our eSensor technology has demonstrated 100% accuracy in clinical studies compared to DNA sequencing in our Cystic Fibrosis Genotyping Test, our Warfarin Sensitivity Test and our Thrombophilia Risk Test. We have also developed a Respiratory Viral Panel Test, which detects the presence of major respiratory viruses and is currently labeled for Research Use Only (RUO). In December 2011, we submitted our Respiratory Viral Panel Test to the FDA for 510(k) clearance. We also have developed a Hepatitis C Virus genotyping assay and a 2C19 genotyping assay, versions of which are available for Research Use Only (RUO). We also have a pipeline of several additional potential products in different stages of development or design, including a diagnostic test for mutations in a gene known as KRAS, which is predictive of an individual’s response rates to certain prescribed anti-cancer therapies, and other tests.

We are also developing our next-generation platform, the NexGen system. We are designing the NexGen system to integrate automated nucleic acid extraction and amplification with our eSensor detection technology to enable technicians using the NexGen system to be able to place a raw or a minimally prepared patient sample into our test cartridge and obtain results without any additional steps. This sample-to-answer capability is enabled by the robust nature of our eSensor detection technology, which is not impaired by sample impurities that we believe hinder competing technologies. We are designing our NexGen system to further simplify workflow and provide powerful, cost-effective molecular diagnostics solutions to a significantly expanded group of hospitals and reference laboratories.

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Since inception, we have incurred net losses from continuing operations each year, and we expect to continue to incur losses for the foreseeable future. Our losses attributable to continuing operations for the three months ended March 31, 2012 and 2011 were approximately $5.5 million and $6.6 million, respectively. As of March 31, 2012, we had an accumulated deficit of $174.0 million. Our operations to date have been funded principally through sales of capital stock, borrowings and revenues. We expect to incur increasing expenses over the next several years, principally to develop our NexGen system and additional diagnostic tests, as well as to further increase our spending to manufacture, sell and market our products.

Results of Operations — Three months ended March 31, 2012 compared to the three months ended March 31, 2011 (in thousands)

Revenue

	March 31,
	2012		2011		$ Change		% Change
Three months ended	$	2,159	$	758	$	1,401		185	%

The increase in revenue for the first quarter ended March 31, 2012 as compared to the first quarter of 2011 was due to higher reagent revenues of $1.9 million versus $608,000 in the comparable period. This increase in reagent revenue was driven by the increase in the number of our installed base of systems as well as our expanded menu of tests available for sale, including products at higher price points than legacy tests.

Cost of Sales and Gross Profit (Loss)

	March 31,
	2012		2011			$ Change		% Change
Cost of Sales-three months ended	$	1,687	$	1,501		$	186		12	%
Gross Profit (Loss)-three months ended	$	472	$	(743	)	$	1,215		164	%

The increase in cost of sales for the first quarter ended March 31, 2012 compared to the first quarter of 2011 was directly related to the increase in reagent sales. The improvement to a gross profit of $472,000 and 22% of revenue versus a gross loss of $743,000 and (98%) of revenue for the first quarter of 2011 was primarily due to two factors. First, the increase in volume allowed for increased absorption of our fixed manufacturing costs since we have unused manufacturing capacity which was put in place in anticipation of future growth. Second, we have realized better manufacturing efficiencies since relocating manufacturing operations from Pasadena, CA to Carlsbad, CA which resulted in substantially improved manufacturing yields.

Operating Expenses

Research and Development

	March 31,
	2012		2011		$ Change			% Change
Three months ended	$	1,949	$	2,564	$	(615	)		(24	)%

The decrease in research and development expense for first quarter ended March 31, 2012 compared to the first quarter of 2011 was primarily due to costs associated with the transition of research and development from Pasadena, CA to Carlsbad, CA in 2011 that did not recur in 2012, including severance-related costs as well as costs related to obtaining FDA certification of the Carlsbad facility, and lower clinical trial costs since there were no clinical trials in process during the first quarter of 2012.

Sales and Marketing

	March 31,
	2012		2011		$ Change		% Change
Three months ended	$	1,418	$	1,219	$	199		16	%

The increase in sales and marketing expense was primarily driven by an increase in sales commissions and other variable sales costs associated with the significant increase in revenue as well as increased headcount costs associated with growing our commercial team in anticipation of continued commercial initiatives and revenue growth.

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General and Administrative

	March 31,
	2012		2011		$ Change		% Change
Three months ended	$	2,587	$	2,123	$	464		22	%

The increase in general and administrative expense for the first quarter ended March 31, 2012 compared to the first quarter of 2011 was primarily due to increased headcount costs associated with building of the management team, including severance costs, and increased use of outside consulting and audit services associated with the Company’s first year of Sarbanes-Oxley compliance.

Other Income (Expense), Net

	March 31,
	2012			2011		$ Change			% Change
Three months ended	$	(44	)	$	18	$	(62	)		(344	)%

Other income (expense) represents non-operating revenue and expenses, earnings on cash and cash equivalents and interest expense related to long-term debt. The increase in other income (expense) for the three months ended March 31, 2012 as compared to the same period in 2011 was due primarily to interest expenses related to long-term debt of $28,000.

Provision for Income Taxes

	March 31,
	2012		2011		$ Change		% Change
Three months ended	$	32	$	11	$	21		191	%

Due to losses, we have only recorded tax provisions or benefits related to interest on uncertain tax positions, minimum tax payments and refunds.

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Liquidity and Capital Resources

To date we have funded our operations primarily from the sale of our common stock, borrowings and revenues. We have incurred net losses from continuing operations each year and have not yet achieved profitability. At March 31, 2012, we had $21.7 million of working capital, including $23.8 million in cash and cash equivalents.

Cash Flows

The following table summarizes, for the periods indicated, selected items in our consolidated statements of cash flows (in thousands):

	March 31,
	2012			2011
Three months ended:
Cash used in operating activities	$	(5,496	)	$	(3,090	)
Cash provided by (used in) investing activities		4,244			(185	)
Cash provided by (used in) financing activities		(267	)		2,000
Net decrease in cash and cash equivalents	$	(1,519	)	$	(1,275	)

Cash flows used in operating activities

Net cash used in operating activities increased $2.4 million to $5.5 million for the three months ended March 31, 2012 compared to $3.1 million for the three months ended March 31, 2011. The increased use of cash during the first quarter of 2012 was due primarily to increased inventory purchases to support higher sales levels in 2012.

Cash flows provided by (used in) investing activities

Net cash provided by investing activities was $4.2 million for the three months ended March 31, 2012, compared to net cash used in investing activities of $0.2 million or the three months ended March 31, 2011. During the first quarter of 2012, a short-term investment of $5.0 million matured and was converted to cash, which was offset by uses of cash for payments for intellectual property and plant, property and equipment. During the first quarter of 2011, cash was used primarily for purchases of instruments to be placed at customer sites.

Cash flows provided by (used in) financing activities

Net cash used in financing activities was $0.3 million for the three months ended March 31, 2012, compared to cash provided by financing activities of $2.0 million for the three months ended March 31, 2011. During the first quarter of 2011, we drew down a $2.0 million term loan on our credit facility. In the first quarter of 2012, we did not draw down any loans and repaid a portion of the long-term debt outstanding.

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In March 2010, we entered into a loan and security agreement with Square 1 Bank, pursuant to which we obtained a credit facility consisting of a revolving line of credit in the amount of up to $2 million and an equipment term loan in the amount of up to $2 million. Based upon certain financial covenants, interest on the revolving line of credit will be either (i) the greater of (a) the bank’s prime rate (3.25% as of March 31, 2012) plus 2.75%, or (b) 6%; or (ii) the greater of (a) the bank’s prime rate plus 3.75%, or (b) 7%. In addition, based upon certain financial covenants, interest on the equipment term loan will be either (i) the greater of (a) the bank’s prime rate plus 3.25%, or (b) 6.50%; or (ii) the greater of (a) the bank’s prime rate plus 4.25%, or (b) 7.50%. The revolving line matures in July 2011 and the term loan matures in July 2013. In March 2011, the loan and security agreement was amended, whereby the line of credit availability was increased to $3 million and the maturity was extended to July 2012. The term loan was modified to allow invoices up to 360 days to qualify to be submitted for credit extension. There were no other changes to these two loans.

In March 2011, an additional loan was made available under the amended loan and security agreement for up to $1.0 million to finance equipment purchases. Based upon certain financial covenants, interest on this equipment term loan will be either (i) the greater of (a) the bank’s prime rate plus 3.25%, or (b) 6.50%; or (ii) the greater of (a) the bank’s prime rate plus 4.25%, or (b) 7.50%. This term loan matures in March 2014.

As of March 31, 2012, we had no outstanding loans on the line of credit or the 2011 equipment loan and had a balance of $1.3 million used to finance 2010 equipment purchases and tenant improvements to our Carlsbad facility on the original 2010 equipment term loan. The loan bears an interest rate of 6.5%. Interest-only payments at the rate of 6.5% were due monthly from the date of each initial equipment advance until July 12, 2011. Initial equipment advances that were then outstanding are payable in 24 equal monthly installments of principal, plus all accrued and unpaid interest, beginning on August 12, 2011 and continuing on the same day of each month thereafter through July 12, 2013.

Pursuant to the terms of the loan and security agreement, we are required to maintain a ratio of liquidity to bank indebtedness equal to at least 1.50 to 1.00. In addition, the loan and security agreement includes several restrictive covenants, including requirements that we obtain the consent of Square 1 Bank prior to entering into any change of control event unless all debt is repaid to Square 1 Bank prior to the change of control event, incurring other indebtedness or liens with respect to our property, making distributions to our stockholders, making certain investments or entering into certain transactions with affiliates and other restrictions on storing inventory and equipment with third parties. The agreement also limits the amount we can borrow under the term loan to license genetic biomarkers to $500,000. To secure the credit facility, we granted Square 1 Bank a first priority security interest in our assets and intellectual property rights. We are currently in compliance will all ratios and covenants.

We have prepared cash flow forecasts which indicate, based on our current cash resources available, the availability of unutilized credit facilities, and our ability to access the equity markets, that we will have sufficient resources to fund our business for at least the next 12 months. We expect capital outlays and operating expenditures to increase over the next several years as we grow our customer base and revenues, expand our research and development, commercialization and manufacturing activities. The amount of additional capital we may need to raise in the future depends on many factors, including:

• the level of revenues and the rate of revenue growth;

• the level of expenses required to expand our sales and marketing activities;

• the level of research and development investment required to maintain and improve our technology;

• our need to acquire or license complementary technologies or acquire complementary businesses;

• the costs of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights;

• competing technological and market developments; and

• changes in regulatory policies or laws that affect our operations.

We cannot be certain that additional capital will be available when and as needed or that our actual cash requirements will not be greater than anticipated. If we require additional capital at a time when investment in diagnostics companies or in the marketplace in general is limited due to the then prevailing market or other conditions, we may not be able to raise such funds at the time that we desire, on acceptable terms, or at all. In addition, if we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders. If we obtain additional debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, and the terms of the debt securities issued could impose significant restrictions on our operations. If we raise additional funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or products, or grant licenses on terms that are not favorable to us.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates including those related to bad debts, inventories, valuation of intangibles and other long-term assets, income taxes, and stock-based compensation. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting policies and estimates are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and there have been no material changes during the three months ended March 31, 2012.

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Contractual Obligations

Real property leases:

On February 8, 2010, we entered into a 91 month lease for a new 31,098 square foot facility in Carlsbad, California. The facility is part of a three-building office and research and development project located at 5964 La Place Court, Carlsbad, California, and the project totals 158,733 rentable square feet. Monthly rental payments of $45,092 commenced on July 14, 2010 and increase 3% annually thereafter. We also pay our pro-rata share of the building and project maintenance, property tax, management and other costs subject to certain limitations. We have paid a $55,000 security deposit and provided a $500,000 standby letter of credit as security for the future rent as well as for up to $2.0 million in landlord funded tenant improvements. The lease also provides for rights of first refusal for expansion within our building, subject to certain limitations.

In January 2012, we entered into a lease amendment for the adjoining facility space totaling an additional 22,000 square feet. We intend to utilize the additional space for storage initially, and build out for additional office and warehouse space in 2013. The lease amendment required an additional security deposit of $22,000 to $77,000 upon signing the amendment, and increases in our standby letter of credit to $858,000 and security deposit to $104,000 to be made upon the earlier of thirty days after the landlord’s approval or deemed approval of the tenant improvement construction drawings or January 1, 2013. Also, the lease amendment requires additional rental payments of $16,000 per month until the earlier of July 1, 2013 or we commence operations in the adjoining space, at which time the rent increases approximately $35,000 per month, with annual increases of 3% to 4%. The lease amendment might require us to pay landlord a liquidated damage of $258,524 in the event of a default by us that results in the early termination of the lease prior to a certain date. The term of the lease is also extended to 91 months after the earlier of July 1, 2013 or we commence operations in the adjoining space and our proportional share of common area maintenance, property management and taxes are increased under the provisions of the amendment to the lease.

The foregoing description of the lease amendment is qualified in its entirety by reference to the actual text of the agreement, a copy of which was filed with our Annual Report on Form 10-K for the year ended December 31, 2011.

Intellectual property:

Effective March 27, 2012, we entered into a Non-Exclusive License Agreement with Caliper Life Sciences, Inc. (the “License Agreement”) which grants us a non-exclusive license under Caliper’s microfluidics patent portfolio. In consideration for the license, we agreed to pay certain up-front and sales-based milestone payments, as well as a royalty on the sale of certain products. In addition, we obtained an unconditional release from any and all claims based upon any alleged infringement of the licensed patents prior to the effective date of the License Agreement.

Effective March 30, 2012, we entered into a Heads of Agreement with Advanced Liquid Logic, Inc. (“ALL”) setting forth certain key terms to be contained in one or more definitive agreements to be negotiated and executed and pursuant to which we will be granted certain exclusive and non-exclusive licenses to use ALL’s proprietary electro-wetting technology in conjunction with electrochemical detection in the development and commercialization of in-vitro diagnostics. Following execution of the definitive agreements, we have agreed to pay up to $3,000,000 in license fees, contingent milestone payments, and an equity investment in ALL.

The foregoing descriptions of the License Agreement and the agreement with Advanced Liquid Logic are qualified in their entirety by reference to the actual text of the respective agreements, copies of which are filed with this Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

Off-Balance Sheet Arrangements

We have no other off-balance sheet arrangements except as follows:

We have unutilized credit facilities with Square 1 Bank that provides a revolving line of credit up to $2.0 million and an unutilized equipment term loan totaling $1.0 million at March 31, 2012.

We have provided a $500,000 standby letter of credit as security for future rent to our landlord in conjunction with the lease of our Carlsbad facility.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is limited to our cash and cash equivalents, all of which have maturities of less than three months and short-term investments, which have maturities of less than one year. The goals of our investment policy are preservation of capital, fulfillment of liquidity needs and fiduciary control of cash and investments. We also seek to maximize income from our investments without assuming significant risk. To achieve our goals, in the future we may maintain a portfolio of cash equivalents and investments in a variety of securities that management believes to be of high credit quality. We currently do not hedge interest rate exposure. Because of the short-term maturities of our cash equivalents, we do not believe that an increase in market rates would have a material negative impact on the value of our portfolio.

Interest Rate Risk

We have exposure to interest rate risk related to our variable rate borrowings. In 2010, we entered into a credit facility consisting of a revolving line of credit in the amount of $2.0 million and an equipment term loan in the amount of up to $2.0 million. In 2011, we amended the credit facility to provide an additional $1.0 million of borrowings to finance equipment purchases. As of March 31, 2012, we had no outstanding loans on the line of credit or the 2011 equipment loan increase and had drawn $2.0 million against the original 2010 equipment term loan. This loan bears an interest rate of 6.5%. As of March 31, 2012, based on current interest rates and total borrowings outstanding, a hypothetical 100 basis point increase in interest rates would have an insignificant pre-tax impact on our results of operations.

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Foreign Currency Exchange Risks

All of our operating facilities are located within the United States. We are a U.S. entity and our functional currency is the U.S. dollar. Virtually all of our revenues are based in the United States. In 2010, we entered into a licensing agreement for intellectual property that requires payment in Euros. We currently have no material operations outside of the United States which diminishes the extent of any foreign currency exchange risk.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our internal control over financial reporting are the controls, processes and procedures designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2012. Based on that evaluation, we have concluded that our disclosure controls and procedures were not effective, at the reasonable assurance level, because of the identification of a material weakness in our internal control over financial reporting. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

During the preparation of our December 31, 2011 financial statements, there were a number of errors identified by the external auditors and us, as well as other control deficiencies. These errors and deficiencies resulted in the need to record adjustments that were immaterial individually and in the aggregate; however, due to the combination of deficiencies, we determined that there was a reasonable possibility that a material misstatement to the annual or interim financial statements might not have been prevented or detected in a timely manner. Specifically, the level of monitoring of our financial closing and reporting process was insufficient to reduce the likelihood of detecting material adjustments to the Company’s books and records. As a result, we identified a material weakness in the Company’s internal control over financial reporting related to the supervision and review of our financial closing and reporting process as of December 31, 2011.

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Remediation of Material Weakness

We have devoted significant resources to addressing the material weakness in internal control over financial reporting and are committed to complete the overall remediation plan as expeditiously as possible. In order to improve our internal control over financial reporting and to remediate the identified material weakness, we have implemented the following:

• Evaluated the staffing level and qualifications of finance department personnel, and made changes as deemed appropriate;

• Evaluated the utilization of external resources, to provide greater assurance that these resources are effectively managed, and deployed, and made changes as appropriate; and

• Formalized and enhanced policies and procedures governing financial reporting processes and related internal control and quality assurance, inincluding documentation, checklists, audit trails and other evidence to support the financial statement balances and related disclosures to facilitate mour management review of the financial information.

We believe that the actions described above will strengthen our internal control over financial reporting and will address the material weakness.

While we have implemented remediation measures to address the material weakness in our internal controls over financial reporting, we have not yet validated, as of March 31, 2012, the effectiveness of our remediation efforts; therefore we have concluded that disclosure controls and procedures are not effective as of March 31, 2012. No material weakness will be considered remediated until the remediation measures we have implemented have operated for an appropriate period, have been tested, and we have concluded that they are operating effectively.

We have reviewed our assessment of the material weakness and our remediation plans, and the status of its implementation and effectiveness with our audit committee. We will continue to assess the effectiveness of our remediation efforts in connection with our future evaluations of internal control over financial reporting.

Changes in Internal Control over Financial Reporting

Except as otherwise discussed above, there has been no change in our internal control over financial reporting that occurred in the quarterly period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no other changes to our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are from time to time subject to various claims and legal actions during the ordinary course of our business. We believe that there are currently no claims or legal actions that would reasonably be expected to have a material adverse effect on our results of operations or financial condition.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors during the three months ended March 31, 2012. For additional information on risk factors, refer to Part I, Item 1A. “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2011.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Use of Proceeds from Registered Securities

On June 3, 2010, we closed our initial public offering, in which we sold 4,600,000 shares of common stock at a price to the public of $6.00 per share. The aggregate offering price for shares sold in the offering was $27.6 million. The offer and sale of all of the shares in the initial public offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-165562), which was declared effective by the SEC on May 28, 2010. The offering commenced as of May 28, 2010 and did not terminate before all of the securities registered in the registration statement were sold. Piper Jaffray acted as sole book-running manager for the offering. William Blair & Company and ThinkEquity LLC acted as co-managers of the offering. There were no selling stockholders in the offering. We raised approximately $22.6 million in net proceeds after deducting underwriting discounts and commissions of $1.9 million and other offering expenses of $3.0 million. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries and to non-employee directors as compensation for board or board committee service. There has been no material change in the planned use of proceeds from our initial public offering as described in our final prospectus filed with the SEC on June 1, 2010 pursuant to Rule 424(b). We invested the funds received in registered money market funds.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The exhibits listed in the Exhibit Index are incorporated herein by reference.

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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.

	GENMARK DIAGNOSTICS, INC.
Date: May 10, 2012	/s/ Richard B. Slansky
	Richard B. Slansky
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EXHIBIT INDEX

Listed and indexed below are all Exhibits filed as part of this report.

10.27**	Non-Exclusive License Agreement by and between Clinical Micro Sensors, Inc. d.b.a. GenMark Diagnostics, Inc. and Caliper Life Sciences Inc. dated effective as of March 27, 2012.
10.28	Executive Employment Agreement, dated March 23, 2012, by and between Clinical Micro Sensors, Inc. d.b.a. GenMark Diagnostics, Inc. and Richard B. Slansky. (Incorporated by reference herein from Exhibit 10.1 to our Form 8-K filed with the Securities and Exchange Commission on April 12, 2012)†
10.29**	Heads of Agreement by and between Clinical Micro Sensors, Inc. d.b.a. GenMark Diagnostics, Inc. and Advanced Liquid Logic, Inc. dated effective as of March 30, 2012.
10.30	Separation Agreement and General Release by and between Clinical Micro Sensors, Inc. d.b.a. GenMark Diagnostics, Inc. and Paul Ross, dated April 19, 2012.
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
101*	XBRL Instance Document
101*	XBRL Taxonomy Extension Schema Document
101*	XBRL Taxonomy Calculation Linkbase Document
101*	XBRL Taxonomy Label Linkbase Document
101*	XBRL Taxonomy Presentation Linkbase Document

* Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

** Confidential Treatment Request

† Management Compensation Plan

EX-10.27

Exhibit 10.27

CONFIDENTIAL TREATMENT REQUESTED

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended. Such redacted portions have been replaced with “***” in this Exhibit. An unredacted version of this document has been filed separately with the Securities and Exchange Commission along with the request for confidential treatment

NON-EXCLUSIVE LICENSE AGREEMENT

This Non-Exclusive License Agreement (this “Agreement”) is entered into this 27th day of March, 2012 (the “Effective Date”), by and between Caliper Life Sciences Corporation, a Delaware corporation having a principal place of business at 68 Elm Street, Hopkinton, MA 01748 (“Licensor”), and Clinical Micro Sensors, Inc. d/b/a GenMark Diagnostics, Inc., a Delaware corporation having a principal place of business at 5964 La Place Court, Carlsbad, CA 92008 (“Licensee”), each also referred to herein individually as a “Party” and collectively as “Parties.”

WHEREAS, Licensor is engaged in research, development and commercialization efforts towards the miniaturization, integration and automation of laboratory equipment, and owns certain patent rights associated therewith;

WHEREAS, Licensee is engaged in the research, development and commercialization of Microfluidics Technology (as defined below) including instruments, software and microfluidic chips;

WHEREAS, the Parties wish to fully and finally resolve all patent issues associated with the aforementioned microfluidics patent rights, upon the terms and subject to the conditions set forth below, and thereby avoid the substantial costs, uncertainty and risk involved with prolonged patent-infringement litigation, trial and appeal;

WHEREAS, Licensee desires to obtain and Licensor desires to grant to Licensee a non-exclusive license to certain patent rights of Licensor for the research, development and commercialization of certain devices and instruments for use in the Field.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS.

1.1 Affiliate(s). “Affiliate(s)” shall mean any person or entity which controls, is controlled by or is under common control with a Party. For the purposes of this Section 1.1, “control” means (a) it owns or controls at least fifty percent (50%) of the equity securities of entity Party and is entitled to vote such securities in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority), or (b) it has the power to directly or indirectly direct or cause the direction of the board of directors or equivalent governing body of entity Party.

1.2 Calendar Quarter. “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 or December 31.

1.3 Calendar Year. “Calendar Year” shall mean the periods of twelve (12) consecutive calendar months ending on December 31.

1.4 Change of Control. “Change of Control” shall mean, with respect to the Licensee, any merger or other transaction or series of transactions (a) which results in the holders of voting securities of Licensee outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of Licensee outstanding immediately after such merger or transaction or series of transactions, or (b) in which a Third Party acquires all or substantially all of Licensee’s business, capital stock outstanding, or assets to which this Agreement applies, whether by merger, acquisition, sale, or otherwise.

1.5 Combination Product. “Combination Product” shall mean a product or combination of products, sold, transferred or otherwise disposed of at a single price, that contains or consists of a Licensed Product and at least one other product that is not a Licensed Product.

1.6 Confidential Information. “Confidential Information” shall mean any information provided to Licensor pursuant to Article 3 of this Agreement, and the terms of this Agreement.

1.7 Control or Controlled. “Control” or “Controlled” shall mean, with respect to any intellectual property right (including any Patent Rights), the possession (whether by ownership or license, or otherwise) by a Party of the ability to grant to the other Party a license or other right as provided herein under such intellectual property without violating the terms of any written agreement existing before the Effective Date with a Third Party.

1.8 Diagnostic Applications. “Diagnostic Applications” shall mean applications and any and all uses that if performed in the United States would require clearance or approval by the U.S. Food and Drug Administration (FDA) through the premarket notification (510(k)) or premarket approval (PMA) process and any and all in vitro diagnostic applications and uses (including those exempt from FDA premarket clearance or approval).

1.9 Field. “Field” shall mean all human Diagnostic Applications, excluding: (a) newborn screening and maternal/fetal prenatal testing, except for the screening and/or testing of cystic fibrosis, and (b) nucleic acid or protein separation, fractionation and life science applications.

1.10 GAAP. “GAAP” shall mean United States generally accepted accounting principles, consistently applied.

1.11 Improvement Patents. “Improvement Patents” shall mean any and all Patent Rights Controlled by Licensor or its Affiliates relating to and within the scope of Microfluidics Technology and that has been first conceived and reduced to practice by Licensor or its Affiliates after the Effective Date and during the Term of this Agreement.

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1.12 Licensed Product. “Licensed Product” shall mean a product (a) Proprietary to Licensee and (b) the manufacture, use, sale, offer for sale or importation of which would, but for the licenses granted herein, infringe a Valid Claim within the Licensed Patents.

1.13 Licensed Patents. “Licensed Patents” shall mean Patent Rights Controlled by Licensor as of the Effective Date of this Agreement that claim or relate to Microfluidics Technology, including those listed in Exhibit A attached hereto; provided, however, that “Licensed Patents” shall not include intellectual property (a) licensed by Licensor from Monogram Biosciences, Inc., or (b) directed to imaging chemistry, imaging automation and/or imaging instrumentation technologies. For clarity, “Licensed Patents” includes any patent that claims or relates to Microfluidics Technology issued following the Effective Date from a patent application filed on or prior to the Effective Date or that claims priority to a patent or patent application filed on or before the Effective Date.

1.14 Microfluidics Technology. “Microfluidics Technology” shall mean compositions of matter, methods and other technology applicable to moving fluids through, and/or modifying chemical and/or biochemical reactions within, channels or chambers, including methods for the manufacture or use of any Microfluidic Device and any devices or software used in connection with any Microfluidic Device. “Microfluidics Technology” shall also include compositions of matter, methods and other technology relating to (a) the structure, design, and manufacture of such fluidics devices, (b) the interfacing of such fluidics devices to external Instruments, (c) the control of fluid movement within, into, and out of such fluidics devices, (d) performing experiments and/or separations within such fluidics devices, (e) the detection of experimental results from or in association with such fluidic devices, and (f) software relating to each of the foregoing.

1.15 Microfluidic Device. “Microfluidic Device” shall mean a consumable device comprising a microfluidic or mesofluidic channel(s).

1.16 Net Sales. “Net Sales” shall mean:

the amount of revenue actually received by Licensee or its Affiliate(s), during any specified period in accordance with GAAP for the sale, transfer, or other disposition of a Licensed Product, less the following deductions to the extent applicable to such amounts: (i) all trade, cash and quantity credits, discounts, rebates or refunds; (ii) credits or allowances for returns, billing errors, damaged, outdated or recalled Licensed Products, in each case during such period; and (iii) packaging costs, handling fees, insurance and prepaid freight, sales taxes, duties and other governmental charges (including value-

3

added tax), but excluding what is commonly known as income taxes; provided that if a Licensed Product is so sold or otherwise transferred for a single price in the form of a Combination Product, Net Sales shall be further calculated pursuant to Section 1.16(b) below;

Notwithstanding the foregoing, in the event that, in any given Calendar Quarter, a Licensed Product is sold as part of a Combination Product, the amount of revenue received for such Licensed Product shall be calculated by multiplying the revenue received for such Combination Product by the fraction A/(A+B) where “A” is the average revenue received for such Licensed Product(s) sold separately during such Calendar Quarter, and “B” is the average revenue received for the other items included in such Combination Product sold separately during such Calendar Quarter.

In the event that such separate sales of components in a Combination Product were not made or performed during the applicable Calendar Quarter, then the amount of revenue received for a Licensed Product that is sold as part of a Combination Product shall be calculated by multiplying the amount of revenue received for the Combination Product by *** percent (***%). The parties agree that any allocation of revenue from the sale or other disposition of Combination Products pursuant to this Section 1.16(b) shall be done in good faith, and shall take into consideration revenue recognition guidance under GAAP which is applicable to multiple-deliverable revenue arrangements.

Net Sales shall not include sales between or among Licensee and its Affiliate; provided that if Licensee sells a Licensed Product to an Affiliate for resale, Net Sales shall include sales by such Affiliate in accordance with GAAP in connection with the resale of such Licensed Product to a Third Party.

Notwithstanding anything else in this in this section, the supply or other disposition of Licensed Products without charge as (i) samples, or (ii) for use in any tests or studies reasonably necessary to comply with any applicable law, regulation or request by a regulatory or governmental authority or as is otherwise reasonable and customary in the industry, in each case shall not be included within the computation of Net Sales.

1.17 Patent Rights. “Patent Rights” shall mean any and all patents, patent applications, including any and all divisionals, continuations, continuations-in-part, reissues, reexaminations, restorations (including supplemental protection certificates) and extensions, pipeline protection, invention certificates, and substitutions of any of the above.

1.18 Proprietary to Licensee. “Proprietary to Licensee” shall mean, with respect to any product, either: (a) Licensee owns, or exclusively or co-exclusively licenses, a Patent Right that covers the making, using, selling, offering for

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

4

sale, or import of such product, or (b) the product embodies or incorporates any other property or intellectual property right owned by or exclusively or co-exclusively licensed to Licensee. In the event of a Change of Control of Licensee, following such Change of Control the term “Proprietary to Licensee” shall be based on (a) the Patent Rights and/or (b) other such property or intellectual property right owned or licensed or otherwise protected by Licensee as a trade secret that are in existence immediately prior to the consummation of such Change of Control transaction, and improvements thereto.

1.19 Royalty Term. “Royalty Term” shall mean the period of time beginning on the Effective Date and, on a Licensed Product-by-Licensed Product, and country-by-country basis, extending until the date on which the last Valid Claim included within the Licensed Patents covering such Licensed Product in such country ceases to be a Valid Claim.

1.20 Territory. “Territory” shall mean the entire world.

1.21 Third Part(y/ies). “Third Part(y/ies)” shall mean any person(s) or entit(y/ies) other than Licensee, Licensor or their respective Affiliates.

1.22 Valid Claim. “Valid Claim” shall mean an issued and unexpired claim of any United States or foreign Patent Right, which claims has not been donated to the public, cancelled, withdrawn, abandonded, disclaimed, or revoked, or held invalid or unenforceable by a court or government agency of competent jurisdiction in an unappealed or unappealable decision.

2. GRANT OF LICENSE

2.1 License to Licensed Patents. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee and its Affiliates a non-exclusive, royalty-bearing license under the Licensed Patents to make, have made, use, import, export, offer for sale, sell and otherwise commercialize Licensed Products in the Territory in the Field. Under the license granted pursuant to this Section 2.1, Licensee shall be permitted to authorize the use of the Licensed Products by its customers within the Field. The license rights granted to Licensee pursuant to this Section 2.1 shall not include any right to grant any sublicenses under the Licensed Patents, except (i) as may be required to enable Licensee to distribute Licensed Products via an authorized distributor or other reseller, or (ii) as may be necessary for Licensee to have a Third Party design, develop or manufacture Licensed Products in collaboration with or for Licensee. Licensed Products shall be sold only by Licensee, it Affiliates or authorized distributors or resellers.

2.2 Option to Improvement Patents. Subject to the terms and conditions of this Agreement, Licensor grants to Licensee an option to obtain a non-exclusive, royalty-bearing license under the Improvement Patents to make,

5

have made, use, import, export, offer for sale, sell and otherwise commercialize Licensed Products in the Territory in the Field. Licensee may exercise this option at any time during the first two (2) years of this Agreement by providing written notice to Licensor. If Licensee exercises its option to Improvement Patents, the Parties shall negotiate in good faith to determine the specific terms and conditions on which the license shall be granted by Licensor to Licensee, in accordance with generally accepted industry standards.

2.3 No Implied Licenses. Nothing herein shall be construed as granting Licensee, by implication, estoppel or otherwise, any license or other right to any intellectual property of Licensor other than the Licensed Patents or to grant to Licensee any right or license other than those expressly granted herein.

3. CONSIDERATION.

3.1 Initial License Fee. Licensee shall pay to Licensor a license fee in the amount of *** United States Dollars ($***) in consideration for the license granted to the Licensed Patents. This license fee shall be payable on or before March 31, 2012, and shall be fully earned by Licensor on the Effective Date. In the event that Licensee does not pay the license fee to Licensor as provided in this Section 3.1, Licensee’s license rights under the Licensed Patents pursuant to this Agreement shall be terminated after written notice and Licensee’s failure to cure within thirty (30) days of such notice.

3.2 Royalty Payments. During the Term of this Agreement, as additional consideration for the license and rights granted to Licensee pursuant to Section 2.1 above, for each Calendar Quarter (or portion thereof) during the Royalty Term, Licensee shall pay running royalties on Net Sales of Licensed Products to Licensor as follows:

(i) ***% of those Net Sales of Licensed Products during a particular Calendar Year between US$*** and US$***;

(ii) ***% of those Net Sales of Licensed Products during a particular Calendar Year between US$*** and US$***; and

(iii) ***% of those Net Sales of Licensed Products during a particular Calendar Year greater than US$***;

For clarity, no royalty shall be due on Net Sales of Licensed Products in any Calendar Year less than $***.

In order to calculate the running royalty payment to be paid for each Calendar Quarter, aggregate Net Sales of Licensed Products occurring

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

6

between the start of the applicable Calendar Year in which the Calendar Quarter falls to the end of that Calendar Quarter, and the associated royalty rate tiers achieved and surpassed, shall be used.

3.3 Royalty Stacking. If Licensee or an Affiliate has obtained or obtains a license(s) from Third Party(ies) for Microfluidics Technology that Licensees reasonably believes is necessary or useful to make, have made, use, sell, offer for sale or import any Licensed Product, Licensee may deduct or credit *** percent (***%) of any royalties payable to such Third Party(ies) from or against running royalties due to Licensor pursuant to this Agreement, provided that in no event shall the running royalties paid to Licensor be reduced by more than *** percent (***%) of the royalties otherwise owed to Licensor absent such deduction or credit. In the event that Licensee claims the benefit of the provisions of this Section 3.3, Licensee shall provide Licensor with reasonable evidence, for example, evidence from a license agreement or royalty report, supporting the amounts deducted or credited against royalties due to Licensor. Licensee’s obligation to provide any such evidence shall be subject to any obligation of Licensee to a Third Party restricting or preventing the disclosure of such information. All information of Licensee which is provided to Licensor under this Section 3.3 shall be deemed to be Licensee’s Confidential Information subject to the provisions of Article 5 hereof.

3.4 Single Royalty. Notwithstanding anything herein to the contrary, with respect to any Licensed Product for which a royalty payment is due only a single royalty payment shall be due and payable, regardless if such Licensed Product is covered by more than one Valid Claim.

3.5 Milestone Payments. As additional consideration for the rights granted to Licensee pursuant to Section 2.1 above, Licensee shall also pay to Licensor the following one-time milestone payments, each distinct and not subsumed by another:

(a) $*** no later than thirty (30) days after the end of the first Calendar Year in which cumulative Net Sales of Licensed Products following the Effective Date first exceed $***;.

(b) $*** no later than thirty (30) days after the end of the first Calendar Year in which cumulative Net Sales of Licensed Products following the Effective Date first exceed $***;

(c) $*** no later than thirty (30) days after the end of the first Calendar Year in which cumulative Net Sales of Licensed Products following the Effective Date first exceed $***; and

(d) $*** no later than thirty (30) days after a Change of Control of Licensee.

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

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3.6 Royalty Statements and Payments. Licensee, within forty five (45) days after the end of each Calendar Quarter, shall deliver to Licensor a report setting forth for such Calendar Quarter the following information, on a Licensed-Product-by-Licensed-Product basis: (a) the Net Sales of each Licensed Product, (b) the cumulative Net Sales of Licensed Products occurring since the start of the applicable Calendar Year and since the Effective Date, and (c) the royalties due hereunder for such Net Sales of each Licensed Product. The total running royalty due for the sale or other disposition of Licensed Products during such Calendar Quarter shall be remitted at the time such report is made. Any royalties not paid when due in accordance with this Section 3.6 accrue interest from the date due at the “bank prime loan” rate (as defined in the U.S. Federal Reserve Bulletin H.15 or any successor thereto) on the last business day of the applicable Calendar Quarter prior to the date on which such payment is due, plus *** percent (***%) per annum, calculated on the basis of a 360-day year.

(a) Taxes and Withholding. All payments under this Agreement will be made without any deduction or withholding for or on account of any tax unless such deduction or withholding is required by applicable laws or regulations. If Licensee is so required to deduct or withhold, Licensee will (i) promptly notify Licensor of such requirement, and (ii) upon request, promptly forward to Licensor an official receipt (or certified copy) or other available documentation evidencing such payment to such authorities.

(b) Currency. All amounts payable and calculations hereunder shall be in United States dollars. As applicable, Net Sales and any deductions therefrom shall be translated into United States dollars at the daily 12 noon buying rate certified by the New York Federal Reserve Bank on the last date of the applicable Calendar Quarter.

(c) Blocked Currency. If at any time legal restrictions prevent the prompt remittance of part or all of payments owed by Licensee with respect to any country in the Territory where Licensed Products are sold, royalty payments on Net Sales of Licensed Products due hereunder shall continue to accrue, and shall continue to be reported, until such time payment shall be made through any lawful means or methods that may be available as Licensee shall reasonably determine.

3.7 Maintenance of Records; Audits.

(a) Record Keeping. Licensee shall keep, and shall cause its Affiliates to keep, accurate books and accounts of record in connection with the sale of Licensed Products, in sufficient detail to permit accurate determination and verification of the running royalties to be paid hereunder. Licensee and its Affiliates shall maintain such records for a period of at least three (3) years after the end of the Calendar Year to which they pertain.

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

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(b) Audits. Upon not less than thirty (30) days prior written notice from Licensor, Licensee shall permit an independent certified public accounting firm selected by Licensor and reasonably acceptable to Licensee, to examine, at Licensor’s sole expense, the relevant books and records of Licensee and its Affiliates necessary to verify the accuracy of the reports submitted by Licensee in accordance with Section 3.6 and the payment of royalties hereunder. An examination by Licensor under this Section 3.6 shall occur not more than once in any Calendar Year and shall be limited to the pertinent books and records for any Calendar Year ending not more than three (3) years before the date of the request, and shall not be permitted more than once with respect to records covering any specific period of time. The accounting firm shall be provided access to such books and records at Licensee’s facility(ies) where such books and records are normally kept and such examination shall be conducted during Licensee’s normal business hours upon reasonable advance notice by Licensor solely to verify the accuracy of the reports submitted by Licensee in accordance with Section 3.6 and the payment of royalties hereunder; provided that such independent certified public accounting firm has entered into a written agreement with Licensee limiting the use of such records to verification of the accuracy of royalties due under this Agreement and prohibiting the disclosure of any information contained in such records to a Third Party for any purpose and to Licensor for a purpose other than as set forth in this Section. Upon completion of the audit, the accounting firm shall provide both Licensee and Licensor with a written report including a numerical summary of payments due and paid, and a description of the basis for any discrepancy therebetween.

(c) Underpayments. If the accounting firm retained pursuant to Section 3.7(b) concludes that additional running royalties were due to Licensor, Licensee shall pay to Licensor the additional running royalties within thirty (30) days of the date Licensee receives such accountant’s written report so concluding. Any overpayment made by Licensee shall be fully creditable against amounts payable in subsequent payment periods. If the accountant’s written report concludes that Licensee made an overpayment, but the Royalty Term of the Agreement has expired, Licensor shall refund the uncontested portion of the overpayment to Licensee within thirty (30) days of the date Licensor receives such accountant’s written report. If Licensee has underpaid royalties due to Licensor hereunder by more than seven and one-half percent (7.5%), then, provided the audited period includes at least four (4) consecutive Calendar Quarters, Licensee shall pay the reasonable expenses of the accounting firm retained pursuant to this Section 3.7.

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(d) Confidentiality. All financial information of Licensee which is subject to review under this Section 3.6 shall be deemed to be Licensee’s Confidential Information subject to the provisions of Article 5 hereof.

3.8 Form of Payments. Unless otherwise mutually agreed in writing, any and all payments to Licensor required under this Agreement shall be made by wire transfer to:

***

4. INTELLECTUAL PROPERTY.

4.1 Filing, Prosecution and Maintenance of Licensed Patents. Licensor, at its own expense, shall have the sole right to prepare, file, prosecute and maintain, throughout the world, all of the Licensed Patents. Upon Licensee’s written request, Licensor shall provide Licensee with information regarding the current status of any Patent Rights included in the Licensed Patents, and any related documentation. Nothing in this Agreement shall be deemed to limit Licensor’s ability to abandon any of the Licensed Patents.

5. CONFIDENTIALITY.

5.1 Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that, for the term of this Agreement and for five (5) years thereafter, each Party (the “Receiving Party”) receiving any Confidential Information of the other Party (the “Disclosing Party”) hereunder shall keep such Confidential Information confidential and shall not publish or otherwise disclose or use such Confidential Information for any purpose other than as provided for in this Agreement, except for Confidential Information that the Receiving Party can establish:

(a) was already known by the Receiving Party (other than under an obligation of confidentiality) at the time of disclosure by the Disclosing Party;

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

10

(b) was available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

(c) became available to the public or otherwise part of the public domain after its disclosure to the Receiving Party other than through any act or omission of a Party in breach of this Agreement;

(d) was disclosed to the Receiving Party by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or

(e) was independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information.

Notwithstanding the foregoing, each Party may disclose the other Party’s Confidential Information and the terms of this Agreement to its advisors, consultants, investors and potential acquirers who have a need to know such Confidential Information and are bound by obligations of confidentiality and non-use substantially similar to those set forth herein.

5.2 Authorized Disclosure. Notwithstanding the foregoing Section 5.1, each Party may disclose Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary to:

(a) exercise rights hereunder provided such disclosure is covered by terms of confidentiality similar to those set forth herein, or

(b) comply with applicable governmental laws and regulations.

In the event the Receiving Party shall deem it necessary to disclose Confidential Information pursuant to this Section 5.2(b), the Receiving Party shall, to the extent possible, give reasonable advance notice of such disclosure to the Disclosing Party and provide reasonable assistance to allow the Disclosing Party to seek confidential treatment of such information.

5.3 SEC Filings. Notwithstanding Section 5.2, Either Party may disclose the terms of this Agreement to the extent required, in the reasonable opinion of such Party’s legal counsel, to comply with applicable laws, including, without limitation, the rules and regulations promulgated by the United States Securities and Exchange Commission. Before disclosing this Agreement or any of the terms hereof pursuant to this Section 5.3, the Parties will consult with one another on the terms of this Agreement to be redacted in making any such disclosure.

5.4 Public Announcements. Except as may be expressly permitted under Section 5.3, neither party will make any public announcement regarding this Agreement without the prior written approval of the other Party.

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6. REPRESENTATIONS AND WARRANTIES.

6.1 Representations and Warranties of Each Party. Each of Licensor and Licensee hereby represents and warrants to the other Party as follows:

(a) it is a corporation or entity duly organized and validly existing under the laws of the state or other jurisdiction of its incorporation or formation;

(b) the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action;

(c) it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder on behalf of itself and its Affiliates as of the Effective Date of this Agreement;

(d) the execution, delivery and performance by such Party of this Agreement and its compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) any agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or bylaws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound; and

(e) the person executing this Agreement has all power and authority necessary to do so.

6.2 Disclaimer. EXCEPT AS PROVIDED IN THIS ARTICLE 6, NEITHER PARTY MAKES ANY WARRANTIES OR CONDITIONS (EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND LICENSOR SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES AND CONDITIONS OF THE VALIDITY OF THE LICENSED PATENTS OR NONINFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

6.3 Representation by Legal Counsel. Each Party hereto represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the party which drafted such terms and provisions.

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6.4 Indemnity. Licensee shall indemnify, defend and hold harmless Licensor and its respective officers, employees, and agents, and their respective successors and assigns (the “Indemnitees”) against any third party liability, damage, loss or expense (including reasonable attorney’s fees and expenses of litigation) incurred by or imposed upon the Indemnitees or any one of them in connection with any claim, suit, action, demand or judgment arising directly out of Licensee, its Affiliates or authorized distributors or resellsers’ manufacture, use, sale, offer for sale or import of Licensed Products. Licensee’s indemnification shall not apply to any liability, damage, loss or expense to the extent that it is attributable to the acts or omissions of the Indemnitees. The foregoing obligation of indemnity is subject to the condition that the Indemnitee shall promptly notify Licensee on being notified or otherwise made aware of a liability, claim, suit, action, demand or judgment and that Licensee defend and control any proceedings using counsel of its choice (with Licensor being permitted to participate at its own expense); provided, that, an Indemnitee may not settle any liability, claim, suit, action, demand or judgment, or otherwise consent to any judgment, without the written consent of Licensee.

6.5 No Other Microfluidics Patent Rights. Licensor represents and warrants that, as of the Effective Date, there are no Patent Rights Controlled by it or its Affiliates, other than the Licensed Patents, that claim or relate to compositions of matter, methods and other technology applicable to moving fluids through, and/or modifying chemical and/or biochemical reactions within, meso or micro scale channels or chambers, including methods for the manufacture or use of any consumable devices comprising such channels or chambers and any devices or software used in connection therewith (including any compositions of matter, methods and other technology relating to (a) the structure, design, and manufacture of such fluidics devices, (b) the interfacing of such fluidics devices to external Instruments, (c) the control of fluid movement within, into, and out of such fluidics devices, (d) performing experiments and/or separations within such fluidics devices, (e) the detection of experimental results from or in association with such fluidic devices, and (f) software relating to each of the foregoing).

7. TERM AND TERMINATION.

7.1 Term. The term of this Agreement will commence on the Effective Date and extend in perpetuity, unless this Agreement is terminated earlier in accordance with this Article 7, on a Licensed-Product-by-Licensed-Product, and country-by-country basis until such time as the Royalty Term with respect to the sale of such Licensed Product in such country expires.

7.2 Termination for Breach. This Agreement may be terminated effective immediately by written notice by either Party at any time during the term of this Agreement for material breach by the other Party, which breach remains

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uncured for sixty (60) days, measured from the date written notice of such breach is given to the breaching Party; provided, however, that if such breach is not susceptible of cure within such sixty (60) day period and the breaching Party uses diligent good faith efforts to cure such breach, such period will be extended as reasonably necessary to cure such breach. However, if Licensee is alleged to be in breach of Article 3 of this Agreement, and Licensee disputes in good faith such breach by written notice to Licensor within such sixty (60) day period (which notice shall set forth in reasonable detail the basis for Licensee’s belief that it is not in default under this Agreement), Licensor shall not have the right to terminate this Agreement until (a) it has been determined through the dispute resolution process provided in Section 9.2 of this Agreement, that Licensee has materially breached Article 3 of this Agreement, and (b) Licensee fails, within thirty (30) days after such determination, to pay, if any, all accrued and unpaid royalties due under this Agreement, together with interest in accordance with Article 3.

7.3 Bankruptcy.

(a) Termination Upon a Bankruptcy Event. To the extent permitted by applicable law, each Party shall have the right to terminate this Agreement upon written notice to the other party in the event of a Bankruptcy Event with respect to the other Party. “Bankruptcy Event” means the occurrence of any of the following: (a) the institution of any bankruptcy, receivership, insolvency, reorganization or other similar proceedings by or against a party under any bankruptcy, insolvency, or other similar law now or hereinafter in effect, including any section or chapter of the U.S. Bankruptcy Code, as amended or under any similar laws or statutes of the United States or any state thereof, where in the case of involuntary proceedings such proceedings have not been dismissed or discharged within one hundred (120) days after they are instituted, (b) the making of an assignment for the benefit of creditors as to all or substantially all of a party’s assets, or (c) the appointment of a receiver, custodian, trustee, liquidator, assignee or other similar official for all or substantially all of a party’s assets.

(b) Rights under Bankruptcy Code. All rights and licenses granted under or pursuant to this Agreement by Licensor are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. The parties agree that Licensee, as licensee of intellectual property under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code.

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7.4 Termination by Licensee. Licensee shall have the right, exercisable upon thirty (30) days prior written notice to Licensor, to terminate this Agreement.

7.5 Termination by Licensor. Licensor shall have the right to terminate this Agreement if Licensee or an Affiliate of Licensee, after the Effective Date, institutes a suit, reexamination, nullity action, opposition to grant, or other legal action in that country, seeking to invalidate the claims of a Licensed Patent, or if Licensee or an Affiliate of Licensee actively participates (other than by legal compulsion) in any of the foregoing (a “Patent Challenge”), except if such Patent Challenge is in whole or part made in defense of a suit or other action against or threatened against Licensee or any of its Affiliates. Such termination shall be effective thirty (30) days after written notice by Licensor to Licensee, unless, within such thirty (30) days, Licensee (or its applicable Affiliate) withdraws such Patent Challenge; provided, however, that if any delay in such withdrawal is caused by an act or omission by Licensor or any of its Affiliates, such 30-day period shall be extended for a period of time equal to the amount of delay caused by Licensor or its Affiliate.

7.6 Effects of Termination. Upon termination of this Agreement for any reason other than a material, uncured breach by Licensor, all licenses granted by Licensor to Licensee hereunder will automatically terminate and be of no further force and effect; provided, however, that Licensee shall have the rights for a reasonable period of time, not to exceed six (6) months, to dispose of existing inventory of Licensed Products, and further provided that all provisions relating to earned royalty obligations set forth herein shall survive termination as to any Licensed Products sold after the effective date of termination.

7.7 Survival of Certain Obligations. Expiration or termination of the Agreement shall not relieve the Parties of any obligation accruing before such expiration or termination, and the applicable provisions of Article 1, 5 and 8, and Sections 3.7, this Section 7.7, Section 9.7 and Section 9.10 shall survive the expiration or termination of the Agreement. Any expiration or early termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement before termination, including, without limitation, the obligations to pay royalties for Licensed Products sold before such termination.

8. RELEASE.

8.1 Release by Licensor. Licensor, on behalf of itself, and its predecessors, successors and assigns, and any parents, subsidiaries and Affiliates, does hereby now and forever release and discharge Licensee, and its predecessors, successors and assigns, and any parents, subsidiaries and other Affiliates,

15

and each of their respective current and former officers, directors, employees, agents, attorneys, and representatives (individually and collectively, the “Released Parties”) from any and all known or unknown claims, damages, actions, causes of actions, defenses, demands, costs or charges, in law or equity, based upon any Released Parties’ manufacture, use, marketing, sale, offering for sale, import or distribution of Licensed Products on or prior to the Effective Date.

8.2 Waiver Of California Civil Code Section 1542 With Respect To The Released Claims. Each Party acknowledges familiarity with the provisions of Section 1542 of the California Civil Code and expressly waives and releases any rights or benefits arising thereunder. Section 1542 of the California Civil Code states:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”

9. MISCELLANEOUS.

9.1 Assignment. Neither this Agreement nor any interest hereunder shall be assignable by Licensee, without the prior written consent of Licensor, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Licensor may freely assign this Agreement to an Affiliate or in connection with the sale of all or substantially all of its assets, to which this Agreement pertains, and Licensee may freely assign this Agreement in connection with a Change of Control provided that the provisions of Section 3.4(d) have been complied with. This Agreement shall be binding upon the successors and permitted assigns of the Parties and the name of a Party appearing herein shall be deemed to include the names of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this Agreement. Any assignment not in accordance with this Section 9.1 shall be void.

9.2 Dispute Resolution. Except as set forth below, Any disputes under this Agreement shall be determined in a dispute resolution process as outlined in this Section 9.2.

(a) Senior Management Consultation. Each Party agrees that, as a first step in any dispute resolution, it shall give the other Party written notice of its grievance and request and participate in a meeting with a senior executive of the other Party to discuss the matter in order to consider informal and amicable means of resolution, and refrain from

16

formal dispute resolution for a period of thirty (30) days after such notice to allow for such a meeting (such time being extendable for good cause by mutual agreement).

(b) Binding Arbitration. If the Parties are unable to resolve their dispute informally through senior management consultation, as contemplated by this Section 9.2., then either Party may demand binding arbitration before JAMS, using the then current JAMS comprehensive arbitration rules and procedures, in which arbitration the following procedures shall control:

(i) The dispute shall be submitted to a single JAMS arbitrator for resolution.

(ii) If possible, the arbitrator shall be selected jointly by the Parties. If the Parties are unable to agree, an arbitrator shall be selected in accordance with the rules and procedures of JAMS.

(iii) Each Party shall be entitled to submit to the other party one set of document requests and one set of simple interrogatories numbering no more than twenty (20), and to take no more than five (5) depositions lasting no more than twenty (20) hours in the aggregate.

(iv) After exchange and submission of briefs by each Party, each main brief not to exceed twenty five (25) pages and reply brief ten (10) pages, each Party shall have a total of two hours in which to argue its case to the arbitrator, unless the arbitrator believes that a decision on the briefs is preferable which shall be entirely his or her decision. All evidence shall be submitted by declaration under oath. There will be no live testimony at the hearing.

(v) A decision shall be rendered by the arbitrator in writing within thirty (30) days of the submission of the dispute by the parties to the arbitrator for resolution, which decision shall be final and binding on the Parties.

(vi) The arbitrator shall have no power to award any relief other than injunctive relief and monetary relief for damages actually incurred, and appropriate declaratory relief with respect to disputed issues under, in connection with, or arising out of this Agreement.

(vii) The Parties shall bear their own attorneys fees and costs of the arbitration, except that the arbitrator may, in his or her discretion, award attorneys’ fees and costs to the prevailing Party, or a portion thereof, upon a finding that the non-prevailing party acted in bad faith.

17

(viii) If the winning Party does not receive the full amount and benefit of the arbitration result from the losing party within thirty (30) days of the decision, the winning Party may resort to the courts of the Commonwealth of Massachusetts to obtain a Court order against the losing Party, and the losing Party shall bear all the costs of the winning Party in such procedure.

Notwithstanding foregoing, any dispute not resolved internally by the Parties pursuant to Section 9.2(a) that involves the validity, infringement or enforceability of a Licensed Patent (a) that is issued in the United States shall be subject to actions before the United States Patent and Trademark Office and/or submitted exclusively to the federal court located in the jurisdiction of the district where any of the defendants reside; and (b) that is issued in any other country (or region) shall be brought before an appropriate regulatory or administrative body or court in that country (or region), and the Parties hereby consent to the jurisdiction and venue of such courts and bodies.

9.3 Force Majeure. Neither Party shall be liable to the other for delay or failure in the performance of the obligations on its part contained in this Agreement if and to the extent that such failure or delay is due to circumstances beyond its control which it could not have avoided by the exercise of reasonable diligence. It shall notify the other Party as soon as reasonably possible should such circumstances arise, giving an indication of the likely extent and duration thereof, and shall use all reasonable efforts to resume performance of its obligations as soon as practicable; provided, however, that neither Party shall be required by this Section 9.3 to settle any labor dispute or disturbance.

9.4 Correspondence and Notices. Any notices required hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile transmission (receipt verified), mailed by registered or certified mail (return receipt requested), postage prepaid, or sent by nationally recognized express courier service, to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice; provided, however, that notices of a change of address shall be effective only upon receipt thereof).

All correspondence to Licensee shall be addressed as follows:

GenMark Diagnostics, Inc.,

5964 La Place Court

Carlsbad, CA 92008

18

Attn: Corporate Secretary

Fax: (760) 448-4301

All correspondence to Licensor shall be addressed as follows:

Caliper Life Sciences Corporation

68 Elm Street

Hopkinton, MA 01748

Attn: Asst. General Counsel

Fax: (774) 278-2726

with a copy to:

PerkinElmer Health Sciences, Inc.

940 Winter Street

Waltham, MA 02451

Attn: General Counsel

Fax: (781) 663-5970

9.5 Amendment. No amendment, modification or supplement of any provision of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party.

9.6 Waiver. No provision of this Agreement shall be waived by any act, omission or knowledge of a Party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party.

9.7 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME.

9.8 Severability. If any clause or portion thereof in this Agreement is for any reason held to be invalid, illegal or unenforceable, the same shall not affect any other portion of this Agreement, as it is the intent of the Parties that this Agreement shall be construed in such fashion as to maintain its existence, validity and enforceability to the greatest extent possible. In any such event, this Agreement shall be construed as if such clause of portion thereof had never been contained in this Agreement, and there shall be deemed substituted therefor such provision as will most nearly carry out the intent of the Parties as expressed in this Agreement to the fullest extent permitted by applicable law.

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9.9 Interpretation. The descriptive headings of this Agreement are for convenience only, and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement. In this Agreement, the singular shall include the plural and vice versa and the word “including” shall be deemed to be followed by the phrase “without limitation.”

9.10 Governing Law. This Agreement shall be governed by and interpreted in accordance with the substantive laws of the Delaware, without regard to conflict of law principles thereof.

9.11 Entire Agreement of the Parties. This Agreement constitutes and contains the complete, final and exclusive understanding and agreement of the Parties and cancels and supersedes any and all prior negotiations, correspondence, understandings and agreements, whether oral or written, among the Parties respecting the subject matter hereof and thereof.

9.12 Independent Contractors. Both Parties are independent contractors under this Agreement. Nothing herein contained shall be deemed to create an employment, agency, joint venture or partnership or fiduciary relationship between the parties hereto or any of their agents or employees, or any other legal arrangement that would impose liability upon one Party for the act or failure to act of the other Party. Neither Party shall have any express or implied power to enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf of, the other Party, or to bind the other Party in any respect whatsoever.

9.13 Counterparts. This Agreement may be executed in any number of counterparts, each of which need not contain the signature of more than one party but all such counterparts taken together shall constitute one and the same agreement. Execution and delivery may be evidenced by a facsimile or electronic transmission of a signed copy of this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, duly authorized representatives of the parties have duly executed this Agreement to be effective as of the Effective Date.

CLINCAL MICRO SENSORS, INC.		CALIPER LIFE SCIENCES CORPORATION
By	/s/ Hany Massarany	By	/s/ Alan Fletcher

Name:	Hany Massarany	Name:	Alan Fletcher
Title:	President and CEO	Title:	VP & GM, New Markets

21

EXHIBIT A

LICENSED PATENTS

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	DE	EPC	Granted	CLS	***	***	***	***	***
***	EP	EPC	Granted	CLS	***	***	***	***	***
***	FR	EPC	Granted	CLS	***	***	***	***	***
***	GB	EPC	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	CH	EPC	Granted	CLS	***	***	***	***	***
***	CN	PCT	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

2

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	DE	EPC	Granted	CLS	***	***	***	***	***
***	EP	ORD	Granted	CLS	***	***	***	***	***
***	FR	EPC	Granted	CLS	***	***	***	***	***
***	GB	EPC	Granted	CLS	***	***	***	***	***
***	JP	PCT	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	EP	EDV	Granted	CLS	***	***	***	***	***
***	JP	DIV	Granted	CLS	***	***	***	***	***
***	KR	DIV	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

3

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	CON	Granted	CLS	***	***	***	***	***
***	CN	DIV	Pending	CLS	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	CH	EPP	Granted	CLS	***	***	***	***	***
***	DE	EPP	Granted	CLS	***	***	***	***	***
***	EP	PCT	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

4

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	FR	EPP	Granted	CLS	***	***	***	***	***
***	GB	EPP	Granted	CLS	***	***	***	***	***
***	JP	PCT	Granted	CLS	***	***	***	***	***
***	US	RCE	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	CH	EPC	Granted	CLS	***	***	***	***	***
***	DE	EPC	Granted	CLS	***	***	***	***	***
***	EP	ORD	Granted	CLS	***	***	***	***	***
***	FR	EPC	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

5

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	GB	EPC	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	RCE	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	PCT	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

6

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	DE	EPC	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

7

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	EP	EPC	Granted	CLS	***	***	***	***	***
***	FR	EPC	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	CN	PCT	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

8

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	PCT	Granted	CLS	***	***	***	***	***
***	DE	EPP	Granted	CLS	***	***	***	***	***
***	EP	PCT	Granted	CLS	***	***	***	***	***
***	FR	EPP	Granted	CLS	***	***	***	***	***
***	GB	EPP	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

9

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	CH	EPP	Granted	CLS	***	***	***	***	***
***	CN	PCT	Granted	CLS	***	***	***	***	***
***	DE	EPP	Granted	CLS	***	***	***	***	***
***	EP	EPP	Granted	CLS	***	***	***	***	***
***	FR	EPP	Granted	CLS	***	***	***	***	***
***	GB	EPP	Granted	CLS	***	***	***	***	***
***	JP	PCT	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	JP	PCT	Granted	CLS	***	***	***	***	***
***	US	RCE	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

10

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	EPP	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	DE	ORD	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

11

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	EP	EPP	Granted	CLS	***	***	***	***	***
***	FR	EPP	Granted	CLS	***	***	***	***	***
***	GB	EPP	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	JP	CIP	Granted	CLS	***	***	***	***	***
***	EP	PCT	Pending	CLS	***	***	***
***	EP	EPP	Pending	CLS	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

12

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	PCT	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

13

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	RCE	Granted	CLS	***	***	***	***	***
***	US	RCE	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

14

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	PCT	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

15

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	EP	CON	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

16

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	RCE	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	EP	ORD	Pending	CLS	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

17

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	DIV	Pending	CLS	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	EP	CON	Pending	CLS	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

18

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	CON	Granted	CLS	***	***	***	***	***
***	JP	CON	Granted	CLS	***	***	***	***	***
***	EP	ORD	Pending	CLS	***	***	***
***	US	PCT	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	DE	CON	Granted	CLS	***	***	***	***	***
***	EP	CON	Granted	CLS	***	***	***	***	***
***	FR	EPC	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

19

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	GB	ORD	Granted	CLS	***	***	***	***	***
***	US	EPC	Granted	CLS	***	***	***	***	***
***	US	EPC	Granted	CLS	***	***	***	***	***
***	US	RCE	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	CN	CIP	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

20

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	EP	PCT	Pending	CLS	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	EP	CON	Allowed	CLS	***	***	***
***	EP	DIV	Pending	CLS	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

21

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	JP	DIV	Pending	CLS	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	US	PCT	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	EP	DIV	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

22

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	EP	DIV	Pending	CLS	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

23

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CIP	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	CH	CON	Granted	CLS	***	***	***	***	***
***	DE	ORD	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

24

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	EP	EPP	Granted	CLS	***	***	***	***	***
***	FR	EPP	Granted	CLS	***	***	***	***	***
***	GB	EPP	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	EP	EPP	Allowed	CLS	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	DE	DIV	Granted	CLS	***	***	***	***	***
***	EP	ORD	Granted	CLS	***	***	***	***	***
***	FR	EPP	Granted	CLS	***	***	***	***	***
***	GB	DIV	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

25

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	EP	CON	Pending	CLS	***	***	***
***	US	PCT	Granted	CLS	***	***	***	***	***
***	CN	CIP	Granted	CLS	***	***	***	***	***
***	US	PCT	Granted	CLS	***	***	***	***	***
***	JP	EPP	Granted	CLS	***	***	***	***	***
***	EP	DIV	Allowed	CLS	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

26

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	EP	DIV	Pending	CLS	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	RCE	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

27

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	US	CON	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	EPP	Granted	CLS	***	***	***	***	***
***	DE	EPP	Granted	CLS	***	***	***	***	***

[***] Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

28

Exhibit A: Licensed Patents

Confidential

Docket Number	Country	Case Type	Status	App Owner	App No.	Filing Date	Application Title	Patent #	Issue Date
***	EP	EPP	Granted	CLS	***	***	***	***	***
***	FR	EPP	Granted	CLS	***	***	***	***	***
***	GB	ORD	Granted	CLS	***	***	***	***	***
***	US	ORD	Granted	CLS	***	***	***	***	***
***	US	DIV	Granted	CLS	***	***	***	***	***
***	US	PCT	Granted	CLS	***	***	***