10KSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-KSB

xANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

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 001-14257

Alpha Innotech Corp.

(Name of small business issuer in its charter)

Delaware	58-1729436
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2401 Merced Street, San Leandro, CA	94577
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number (510) 483-9620

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

   Title of class              Name of each exchange on which registered

None

Securities registered pursuant to section 12(g) of the Act:

Title of each class

Common Stock, par value $.01 per share 

 Check whether the issuer is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.      ¨

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 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  ¨

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  x

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

State Issuer’s revenues for its most recent fiscal year: $13,253,844.

The aggregate market value of Alpha Innotech Corp Common Stock, $.01 par value, held by non-affiliates, computed by reference to the average of the closing bid and asked prices as reported by OTCBB on March 15, 2007, was $2,805,795.72. Shares of common stock held by each officer and director and by each person who owns 5% or more of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

Number of shares of Common Stock of Alpha Innotech Corp., $.01 par value, issued and outstanding as of March 15, 2007: 9,891,393.

Documents Incorporated by Reference

Portions of the Registrant’s Definitive Proxy Statement for the 2007 Annual Meeting are incorporated by reference into Part III of this Form 10-KSB.

Transitional Small Business Disclosure Format (Check one):    Yes  ¨    No  x

TABLE OF CONTENTS

FORWARD LOOKING STATEMENTS			3
PART I			3
	ITEM 1.	DESCRIPTION OF BUSINESS	3
	ITEM 2.	DESCRIPTION OF PROPERTY	9
	ITEM 3.	LEGAL PROCEEDINGS	9
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	9
PART II			10
	ITEM 5.	MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES	10
	ITEM 6.	MANAGEMENT’S DISCUSSION AND ANALYSIS	10
	ITEM 7.	FINANCIAL STATEMENTS	16
	ITEM 8.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	16
	ITEM 8A.	CONTROLS AND PROCEDURES	16
	ITEM 8B.	OTHER INFORMATION	16
PART III			17
	ITEM 9.	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT	17
	ITEM 10.	EXECUTIVE COMPENSATION	18
	ITEM 11.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	18
	ITEM 12.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	18
	ITEM 13.	EXHIBITS	19
	ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	20
CONSOLIDATED FINANCIAL STATEMENTS			F-1
SIGNATURES			S-1
EXHIBITS

2

FORWARD LOOKING STATEMENTS

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Information included in this Form 10-KSB may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Except for the historical information contained in this discussion of the business and the discussion and analysis of financial condition and results of operations, the matters discussed herein are forward looking statements. These forward looking statements include but are not limited to the Company’s plans for sales growth and, expectations of gross margin, expenses, new product introduction, and the Company’s liquidity and capital needs. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. In addition to the risks and uncertainties described in “Risk Factors” below and elsewhere in this Form 10-KSB, these risks and uncertainties may include consumer trends, business cycles, scientific developments, changes in governmental policy and regulation, currency fluctuations, economic trends in the United States and inflation. Forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Our actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Introduction

 On January 26, 2004, Alpha Innotech Corp. (formerly Xtrana, Inc.) entered into an Assignment Agreement with Applera Corporation through its Applied Biosystems Group. Pursuant to the terms of the Assignment Agreement, Applied Biosystems purchased all of Xtrana’s intellectual property, other than trademarks and trade names. Prior to the sale, Xtrana, Inc. developed and marketed nucleic acid-based tests for use in drug discovery, detection of environmental and food contaminants, forensics and identity testing, human and animal diseases, genetic predisposition to disease, and other applications.

 On December 14, 2004, Alpha Innotech Corp. entered into the previously disclosed Agreement and Plan of Merger (as amended on each of April 6, 2005, July 6, 2005 and August 25, 2005, the “Merger Agreement”) with Alpha Innotech Corporation, a California corporation (“Alpha CA”), and AIC Merger Corporation, our wholly-owned subsidiary (“Merger Sub”). The closing of the transactions contemplated under the Merger Agreement (the “Merger”) occurred on October 3, 2005.

 The Company was incorporated in the State of Delaware in January 1987, as Cytrix Biopool, Ltd. In June 2001, it changed its name to Xtrana, Inc. As a result of the Merger, Xtrana changed its name to “Alpha Innotech Corp.” Alpha Innotech Corp. is alternatively referred to in this report as “we,” “us,” “our,” or the “Company”.

Products and Markets

As a result of the Merger, we now manufacture and sell analytical laboratory instruments (NAICS #334516), software and consumables used in life science research laboratories for the study of nucleic acids (DNA and RNA), proteins and cells.

Products

Most of our sales come from a line of instruments we group under the heading Macroimaging. These imaging systems, sold under our trademarks AlphaDigiDoc®, AlphaImager® and FluorChem®, comprise a digital camera and bench-top dark enclosure and are used to detect, archive, and analyze fluorescent, chemiluminescent and visible signals from biological samples, such as DNA, proteins and bacterial colonies. We offer a comprehensive Macroimaging system product line spanning a wide spectrum of prices and product specifications. Other products in the Macroimaging group include ultraviolet and visible wavelength illuminators (including the Chromalight^™ multiwavelength illuminator), software (AlphaEase® software for data acquisitions and analysis, Alpha GelFox^™ software for 2D gel analysis and Alpha PART 11 Ease® software for 21 C.F.R. Part 11 compliance), and reagents and assay kits (ChemiGlow® chemiluminescent substrate, AlphaQuant® molecular ladders, and FAST TF transcription factor assay kit).

 We also sell a line of instruments we group under the heading Microimaging. Researchers use our Microimaging products to analyze slides or multi-well microplates “printed” with genomic, proteomic, or cellular samples, and in some cases, fixed cell cultures. We currently market two instruments for the Microimaging market: the AlphaScan® laser scanner and the NovaRay® detection platform. We offer ArrayVision® data collection software for use with either system.

3

Markets

We have three customer bases: (1) domestic end users who receive a quote directly from us through a direct sales representative or through a manufacturer’s representative, (2) international distributors who resell to end users outside the US, and (3) GE Healthcare, to which we supply products on an OEM basis. When viewed this way, 2006 sales break down as follows: (1) direct and manufacturers’ representative domestic sales of approximately 46%, (2) international distributors’ sales of approximately 35%, and (3) OEM sales to GE Healthcare of approximately 19%.

Distribution

In the United States, we sell our products through a network of direct sales representatives and independent manufacturers’ representatives. Internationally, we sell our products through a network of independent distributors. Our independent distributors generally have exclusive distribution rights for their respective territories and/or products and perform sales, marketing and technical support functions for their local customers. We also manufacture instruments for distribution by GE Healthcare on an OEM basis.

Competition

The Macroimaging instruments we sell face intense competition from laboratory instrumentation manufacturers such as Bio-Rad Laboratories, Inc., Syngene, UVP, Inc., Fuji Photo Film Co., Ltd. and Eastman Kodak Co. The Macroimaging market is relatively mature, and product offerings of most of the major competitors are similar to ours in technical specifications and price. The Microimaging instruments we sell also encounter strong competition from products offered by Perkin Elmer, Molecular Devices, Tecan, and Applied Precision.

We intend to compete through our efforts to optimize our distribution channel, to bring new products to market, and to decrease costs of manufacturing inputs. We cannot be certain that our initiatives will prove to be successful, or that we will have sufficient funds to fully implement them.

Sources and Availability of Materials

We use original equipment manufacturers, or OEMs, for various parts of our products, including the cameras, cabinets, transilluminators, certain subassemblies, filters and lenses. We obtain these key components from a small number of sources. In 2006 we obtained most of our cameras from a limited number ofsuppliers, including: Roper Scientific of Tucson, AZ, Diagnostic Instrument of Sterling Heights, MI, Point Grey of Vancouver, Canada, and Apogee of Roseville, CA. We obtained most of our cabinets from Custom Product Development of Livermore, CA and Pacific Imaging Electronics, Ltd. in Taiwan. From time to time, we have experienced delays in obtaining components from certain of our suppliers, which have had an impact on our production schedule for imaging systems. We believe that alternative sources for these components in the event of a disruption or discontinuation in supply would not be available on a timely basis, which would disrupt our operations and impair our ability to manufacture and sell our products.

Dependence on One or Few Customers

In fiscal year ending December 31, 2006, sales to GE Healthcare accounted for approximately 19% of our total sales; no other customer accounted for more than 6% of our sales. In fiscal year ending December 31, 2005, sales to GE Healthcare accounted for approximately 6% of our total sales; no other customer accounted for more than 7% of our sales.

Intellectual Property

Our patent portfolio consists of four issued U.S. patents relating to Macroimaging and Microimaging technology. These patents expire in 2018, 2022 and 2024.

Under the terms of an agreement with Digital Optical Imaging Corporation (“DigiOpt”), we received certain exclusive license rights to make and sell products incorporating the inventions disclosed in four of DigiOpt’s United States patents. These patents describe the use of micro-optical-electrical-mechanical components such as digital micro mirror devices for controlling both excitation and emission light in ways that can improve the performance of instruments like the NovaRay^®. The agreement remains in effect until the last underlying patent or patent application has expired or is abandoned. The latest to expire patent covered by this agreement is scheduled to expire in 2021. We committed to pay certain patent prosecution fees and costs; to date these costs have been minimal. We also committed to pay DigiOpt guaranteed minimum royalties of the aggregate of $40,000 over the five-year period beginning the earlier of the first commercial sale of a product incorporating the technology or October 30, 2007. We have not made any royalty payments to date. DigiOpt may convert the exclusive license rights to non-exclusive if we do not make a first commercial sale by October 30, 2007, or terminate them outright if we do not make a first commercial sale by April 30, 2008.

Our proprietary instrument designs and software are also protected under state and federal trade secret and copyright law.

4

Alpha GelFox™ and Chromalight™ are trademarks of the Company. The Alpha Innotech logo and the word marks AlphaDigiDoc®, AlphaEase®, AlphaImager®, Alpha PART 11 Ease®, AlphaQuant®, AlphaScan®, ChemiGlow®, FluorChem®, and NovaRay® are registered trademarks of the Company. All other trademarks, service marks and tradenames appearing in this Form 10-KSB are the property of their respective owners.

Effect of Existing or Probable Governmental Regulation on the Business

 Our revenues derived from sales in China through distributors and resellers may be adversely impacted by recent and future changes in the regulatory environment in China, which could significantly impact our total revenues. For example, the Measures for Control of Pollution from Electronic Information Products (hereinafter referred to as the "Measures"), jointly enacted by seven government agencies of the People's Republic of China ("PRC"), took effect as of March 1, 2007. The Measures apply to the manufacture, import and sale of electronic information products within the territory of the PRC and require manufacturers or importers of electronic information products to ensure the products they produce or import comply with national and industrial standards of the PRC on control of hazardous substances and to label products containing certain hazardous substances, such as lead, mercury, cadmium, and hexavalent chromium. Any delays in our ability, or our inability, to comply with such new regulations will adversely affect our business. Further regulatory changes in China and any other jurisdiction where we derive a significant amount of revenue may adversely affect our business.

Research and Development Activities

Our research and development activities are focused on sustaining engineering and product development for the Macroimaging product line, and evaluation of new product candidates identified through business development. We spent $1,227,324 in 2006 and $1,573,017 in 2005 on research and development.

Employees

As of December 31, 2006, we had 44 full-time employees and 4 part-time employees. We consider our relations with employees to be satisfactory. None of our employees is covered by a collective bargaining agreement.

RISK FACTORS

Our business is subject to various risks, including those described below. You should carefully consider the following risk factors and all other information contained in this Form 10-KSB. If any of the following events or outcomes actually occurs, our business, operating results, and financial condition would likely suffer.

Alpha CA has a history of operating losses and may incur future losses.

Alpha CA has not been profitable since 1999. Alpha CA’s net losses were $1.0 million, $2.5 million, $3.3 million for fiscal years 2006, 2005 and 2004, respectively and it had an accumulated deficit of $18.4 million as of December 31, 2006 and $17.4 million as of December 31, 2005. Our losses have resulted principally from costs incurred in research and development, and from selling, general and administrative costs associated with operations.

Our ability to generate significant revenues and maintain profitability is dependent in large part on our ability to expand our customer base, increase sales of our current products to existing customers, manage our expense growth, and enter into additional supply, license and collaborative arrangements as well as on our ability to successfully manufacture and commercialize products incorporating our technologies in new applications and in new markets.

Our competitors have more resources than we do.

Our products face competition from other companies that have more financial resources, technical staff and manufacturing and marketing capabilities than we do. It may be difficult for us to compete with larger companies investing greater resources in development, marketing and distribution of their products.

Additional financing may be required for our future business and operations.

We may require additional capital resources in order to conduct our operations and develop our products. We estimate that our capital resources will be sufficient to fund our current level of operations over the near term. However, additional funds may be required to implement our business plan over the longer term. We may not be successful in raising such additional capital on favorable terms or at all.

5

Our business depends on research and development spending levels of pharmaceutical and biotechnology companies and academic and governmental research institutions.

We expect that our revenues in the foreseeable future will be derived primarily from products and services provided to pharmaceutical and biotechnology companies and academic, governmental and other research institutions. Our success will depend upon their demand for and use of our products and services. Our operating results may fluctuate substantially due to reductions and delays in research and development expenditures by these customers. These reductions and delays may result from factors that are not within our control, such as:

•changes in economic conditions;

•changes in government programs that provide funding to companies and research institutions;

•changes in the regulatory environment affecting life sciences companies and life sciences research;

•market-driven pressures on companies to consolidate and reduce costs; and

•other factors affecting research and development spending.

We depend on a limited number of suppliers and we will face delays in manufacturing of our products if shipments from these suppliers are delayed or interrupted.

We depend on our vendors to provide components of our products in required volumes, at appropriate quality and reliability levels, at certain prices and in compliance with regulatory requirements. If supplies from these vendors were delayed or interrupted for any reason, we would not be able to produce or sell products in a timely fashion or in sufficient quantities or under acceptable terms.

Our dependence on contract manufacturing and outsourcing other portions of our supply chain may adversely affect our ability to bring products to market.

As part of our efforts to streamline operations and to cut costs, we have been outsourcing and will continue to evaluate additional outsourcing of certain operations. If our contract manufacturers or other outsourcers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to timely bring products to market could suffer.

If we are unable to maintain our relationships with collaborative partners, we may have difficulty developing and selling our products and services.

We believe that our success in penetrating our target markets depends in part on our ability to develop and maintain collaborative relationships with companies that help us develop and sell products. Relying on these or other collaborative relationships is risky to our future success because:

•our partners may develop technologies or components competitive with our products;

•some of our agreements may terminate prematurely due to disagreements between us and our partners;

•our partners may not devote sufficient resources to the development and sale of our products;

•our partners may be unable to provide the resources required for us to progress in the collaboration on a timely basis;

•our collaborations may be unsuccessful; or

•we may not be able to negotiate future collaborative arrangements on acceptable terms.

If we are unable to maintain our relationships with our selling and distribution partners, our growth and financial results may be adversely affected.

As a small company, we must continue to nurture current and future distribution partners in order to continue to grow. Any issue that materially affects our ability to deliver and support products with any of our current or future distribution partners could significantly impact financial results.

6

Due to the international nature of our business, political or economic changes or other factors could harm our business.

In fiscal 2006, 43.9 % of our revenues was generated from sales outside the United States. Changes in diplomatic and trade relationships may have a material adverse effect on our business, financial condition and operating results or require us to modify our current business practices.

We could fail in our efforts to expand our distribution and development activities in Asia.

We intend to expand our distribution channels in Asia and to seek third parties there to collaborate in offshore development efforts. We have not had extensive operations in Asia and therefore may lack necessary expertise to successfully increase our sales and development activities in the region or generate profits from such activities. Such expansion plans may also require additional funding which may not be available on favorable terms, if at all. 

Third parties may claim that we are infringing their intellectual property, and we could suffer significant litigation or licensing expenses or be prevented from selling products.

While we do not believe that any of our products infringe the valid intellectual property rights of third parties, we may be unaware of intellectual property rights of others that may cover some of our technology, products or services. Any litigation regarding patents or other intellectual property could be costly and time-consuming and could divert our management and key personnel from our business operations. The complexity of the technology involved and the uncertainty of intellectual property litigation increase these risks. Claims of intellectual property infringement might also require us to enter into costly license agreements. However, we may not be able to obtain license agreements on terms acceptable to us, or at all. We also may be subject to significant damages or injunctions against development and sale of certain of our products.

Third parties may infringe our intellectual property, and we may expend significant resources enforcing our rights or suffer competitive injury.

Our success depends in large part on our proprietary technology. We rely on a combination of patents, copyrights, trademarks, trade secrets, confidentiality provisions and licensing arrangements to establish and protect our proprietary rights. If we fail to successfully enforce our intellectual property rights, our competitive position could suffer, which could harm our operating results.

Our pending patent and trademark registration applications may not be allowed, or competitors may challenge the validity or scope of our patents, copyrights or trademarks. In addition, our patents may not provide us a significant competitive advantage.

We may be required to spend significant resources to monitor and police our intellectual property rights. We may not be able to detect infringement and our competitive position may be harmed before we do so. In addition, competitors may design around our technology or develop competing technologies. Intellectual property rights and our ability to enforce them may also be unavailable or limited in some foreign countries, which could make it easier for competitors to capture market share and result in lost revenues. These risks will become greater as we move forward with plans to increase offshore development and manufacturing.

Recent changes in management may be disruptive.

We had significant changes in management during 2006. Effective March 15, 2006, Ronald H. Bissinger replaced Darryl Ray as CFO and COO. Effective September 27, 2006, Ronald H. Bissinger replaced Haseeb Chaudhry as CEO. Effective November 28, 2006, Jeff Whitmore became VP Global Sales. Additions of new personnel and departures of existing personnel, particularly in key positions, can be disruptive, might lead to additional departures of existing personnel and could have a material adverse effect on our business, operating results and financial condition.

If we lose our key personnel or are unable to attract and retain additional skilled personnel, our business may suffer.

We depend substantially on the principal members of our management, including Ronald Bissinger, Chief Executive Officer, Chief Operating Officer and Chief Financial Officer. Any officer or employee can terminate his or her relationship with us at any time and work for one of our competitors. Our ability to operate successfully and manage our potential future growth depends significantly upon retaining key research, technical, sales, marketing, managerial and financial personnel, and attracting and retaining additional highly qualified personnel in these areas. We face intense competition for such personnel from numerous companies in the highly competitive northern California business area. The inability to attract and retain these personnel could result in delays in the research, development and commercialization of our potential products.

To attract and retain qualified personnel, we may need to grant large stock-based incentives that could be dilutive to our shareholders and we may be required to offer highly competitive salaries which would increase future operating costs.

To attract and retain skilled personnel, we may be required to issue large stock option grants or other equity incentives which may be significantly dilutive to existing shareholders. Due to application of SFAS 123(R), such equity incentives would require us to record compensation expenses that would adversely impact earnings. If we are required to pay highly competitive base salaries and cash bonuses to attract and retain skilled personnel, our operating results would also suffer.

7

We may engage in future acquisitions, which could be expensive and time consuming, and such acquisitions could adversely affect your investment in us as we may never realize any benefits from such acquisitions.

Although we currently have no commitments or agreements with respect to any material acquisitions, we may seek to acquire technologies, products or companies to expand our business. If we do undertake any transactions of this sort, the process of integrating an acquired business, technology, service or product may result in operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of our business. Moreover, we may never realize the anticipated benefits of any acquisition. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and amortization expenses related to other intangible assets or the impairment of goodwill, which could adversely affect our results of operations and financial condition.

Integrating technologies may be costly and may not result in technological advances.

We are working with collaborators to integrate certain technologies into future products. However, market advances resulting from the integration of these technologies may not be achieved as successfully or rapidly as anticipated, if at all.

If we suffer loss to our factories, facilities or distribution system due to catastrophe, our operations could be seriously harmed.

Our factories, facilities and distribution system are subject to catastrophic loss due to fire, flood, terrorism or other natural or man-made disasters. In particular, our production facilities and headquarters in California could be subject to a catastrophic loss caused by earthquake. Although we outsource the manufacturing of some products and components, final assembly, testing and storage occurs at our San Leandro, California facilities. If these facilities were to experience a catastrophic loss, it could disrupt our operations, delay production, shipments and revenue and result in large expenses to repair or replace the facility. Although we carry insurance for property damage and business interruption, we do not carry insurance or financial reserves for interruptions or potential losses arising from earthquakes.

Compliance with Section 404 of the Sarbanes-Oxley Act of 2002 will entail significant expenditure and could materially affect our financial results.

Effective internal reporting controls are necessary for us to provide reliable financial reports and effectively detect and prevent fraud. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required beginning with our fiscal year ending December 31, 2007 to include in our annual report our assessment of the effectiveness of our internal control over financial reporting. Furthermore, our registered independent public accounting firm will be required to report on our assessment of the effectiveness of our internal control over financial reporting and separately report on the effectiveness of our internal control over financial reporting beginning with our fiscal year ending December 31, 2008. We have not yet completed our assessment of the effectiveness of our internal control over financial reporting, and complying with this requirement continues to require significant accounting, legal and other costs. If we fail to timely complete this assessment, or if our independent registered public accounting firm cannot attest to our assessment, we could be subject to regulatory sanctions and a loss of public confidence. Also, any lack of effective internal control over financial reporting may adversely impact our ability to prepare timely and accurate financial statements.

Only a relatively small quantity of our shares is available for trade and as a result, our stock may suffer from limited liquidity and significant volatility.

The amount of float of our stock is relatively small and as such investors may find it difficult to acquire or sell our stock. Our historical trading volume has been small and single trades are capable of causing large changes in our stock price.

Our directors, officers and principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders.

 As of December 31, 2006, our officers, directors and principal stockholders each holding more than 5% of our common stock collectively control approximately 68% of our outstanding common stock. As a result, these stockholders, if they act together, are able to control the management and affairs of our company and most matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock. This concentration of ownership may not be in the best interests of our other stockholders.

8

Rules applicable to trading of our common stock reduce the level of trading in the secondary market for our stock and as a result, investors may find it difficult to sell their shares.

Trades of our common stock are subject to Rule 15g-9 of the Securities and Exchange Commission, known as the Penny Stock Rule. This rule imposes requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, broker/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser’s written agreement to the transaction prior to sale. The Securities and Exchange Commission also has rules that regulate broker/dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in that security is provided by the exchange or system). The Penny Stock Rule requires a broker/ dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker/dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker/dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. These disclosure requirements have the effect of reducing the level of trading activity in the secondary market for our common stock. As a result of these rules, investors may find it difficult to sell their shares.

AVAILABLE INFORMATION

We make available free of charge on or through our Internet website our annual reports on Form 10-KSB, quarterly reports on Form 10-QSB, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission. Our Internet website address is “www.alphainnotech.com”. The reference to our Internet website does not constitute incorporation by reference of the information contained on or hyperlinked from our Internet website. Our filings are also available online at the Securities and Exchange Commission (SEC) website on the Internet. The address of that site is www.sec.gov. The materials are also available at the SEC's Public Reference Room, located at 100 F Street, Washington, D.C. 20549. The public may also obtain information through the public reference room by calling the SEC at 1-800-SEC-0330.

ITEM 2. DESCRIPTION OF PROPERTY

Headquarters, manufacturing, and research and development are housed in 35,000 square feet of leased space in San Leandro, California. This lease expires November 30, 2011. The rental rate is $578,500 per year.

Our existing facilities are not yet being used at full capacity and management believes that these facilities are adequate and suitable for current and anticipated needs.

ITEM 3. LEGAL PROCEEDINGS

We are not involved in any legal proceedings that would have a material adverse impact on our business, financial condition or results of operations.

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

None.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

 Our common stock previously traded on the OTC Bulletin Board under the symbol “XTRN.” The Merger, and the 1 for 10 reverse stock split made in connection with the Merger, was completed on October 3, 2005. Our common stock began trading on the OTC Bulletin Board under the new symbol “APNO” on October 6, 2005. For the periods indicated, the following table sets forth the high and low bid prices per share for our common stock, as reported by OTC BB Reports. In constructing the following table, we adjusted prices reported by OTC BB Reports for trades occurring on or before October 3, 2005 to reflect the 1 for 10 reverse stock split. The prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.

Fiscal Year 2006	High Bid		Low Bid
First Quarter	$	1.69	$	1.05
Second Quarter		1.70		1.05
Third Quarter		1.15		0.70
Fourth Quarter		1.30		0.70
Fiscal Year 2005		High Bid		Low Bid
First Quarter*	$	1.95	$	1.40
Second Quarter*		1.75		1.40
Third Quarter*		2.05		1.41
Fourth Quarter		2.00		0.15

*Price quotes are those of Xtrana, Inc., the predecessor of Alpha Innotech Corp. See Business Description.

Holders

As of March 16, 2006, there were approximately 144 record owners of our common stock.

Dividends

We have never paid cash dividends and have no plans to do so in the foreseeable future. Our future dividend policy will be determined by our board of directors and will depend upon a number of factors, including our financial condition and performance, our cash needs and expansion plans, income tax consequences, and the restrictions that applicable laws, our current preferred stock instruments, and our future credit arrangements may then impose.

ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying Consolidated Financial Statements and related notes. Certain statements made in this report may constitute forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” and similar expressions identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Form 10-KSB. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Alpha Innotech does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this filing. Our actual results could differ materially from those anticipated by these forward-looking statements due to factors, including, but not limited to, those set forth under “Risks Factors” and elsewhere in this report.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Alpha Innotech bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In addition, estimates and assumptions about future events and their effects cannot be determined with certainty. These estimates and assumptions may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have been included in the consolidated financial statements as soon as they became known. Actual results may differ from these estimates under different assumptions or conditions. In addition, we are periodically faced with uncertainties, the outcomes of which are not within our control and may not be known for extended periods of time. These uncertainties are discussed in this report in the section entitled “Risk Factors.”

Our critical accounting policies are set forth below.

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Revenue Recognition

Our revenue is derived from the sale of digital imaging systems and other products, net of returns and allowances and is recognized when a contract is executed, all delivery obligations have been met, the fee is fixed and determinable, and collectibility is probable. All products are sold with a 1-year standard warranty agreement and we record an associated reserve for estimated warranty costs.

For products sold where software is deemed to be more than incidental, we follow Statement of Position (“SOP”) 97-2, “Software Revenue Recognition,” as amended. Revenue earned on software arrangements involving multiple elements is allocated to each element based on vendor-specific objective evidence, which is based on the price charged when the same element is sold separately. When a digital imaging system is sold, the multiple elements are software and maintenance and support. Revenue allocated to software is recognized when a contract is executed, all delivery obligations have been met, the fee is fixed and determinable, and collection is probable. Revenue allocated to maintenance and support is recognized ratably over the maintenance term, typically for a period of one year, beginning when a digital imaging system is considered sold or an extended maintenance and support contract is signed.

Revenue is recorded net of estimated returns. Our management makes estimates of potential future product returns related to current period revenue. We analyze historical returns, current economic trends and changes in our customer demand and acceptance of our product when evaluating the adequacy of our allowance for sales returns and other allowances, such as allowance for bad debts, in any accounting period. As of December 31, 2006 our allowance for sales returns was $143,453 and our allowance for doubtful accounts was $7,158.

Inventory

We record inventories at the lower of cost or market value, with cost generally determined on a first-in, first-out basis. We perform periodic valuation assessments based on projected sales forecasts and analyis of upcoming changes in future configurations of our products, and record inventory write-downs for excess and obsolete inventory. As of December 31, 2006, our allowance for excess and obsolete inventory was $41,834.

Deferred Taxes Valuation Allowance

We believe sufficient uncertainties exist regarding the future realization of deferred tax assets, and, accordingly, a full valuation allowance is required, amounting to$5,482,781 at December 31, 2006. In subsequent periods if and when we generate pre-tax income, a tax expense will not be recorded to the extent that the remaining valuation allowance can be used to offset that expense. Once a consistent pattern of pre-tax income is established or other events occur that indicate that the deferred tax assets will be realized, additional portions or all of the remaining valuation allowance will be reversed back to income. Should we generate pre-tax losses in subsequent periods, a tax benefit will not be recorded and the valuation allowance will be increased. Despite the valuation allowance, we retain the ability to utilize the benefits of net operating loss carryforwards and research and development credits.

Share-Based Employee Compensation

 Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS 123R using the modified prospective transition method. Under the modified prospective transition method, prior periods are not restated for the effect of SFAS 123R. Starting with the first quarter of 2006, compensation cost includes all share-based payments granted prior to, but not vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and compensation for all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123R. The Company recognizes the fair value of its stock option awards as compensation expense over the requisite service period of each award, generally four years. Compensation expense related to stock options granted prior to January 1, 2006 and on or after January 1, 2006 is recognized on a straight-line basis.

 Prior to the adoption of SFAS 123R, the Company accounted for share-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. The Company also followed the disclosure requirements of SFAS 123, “Accounting for Stock Based Compensation.” In general, as the exercise price of options granted under the Company’s plans was equal to market price of the underlying common stock on the grant date, no share-based employee compensation was recognized in the Company’s net (loss) for periods prior to the adoption of SFAS 123R.

The following table presents share-based compensation expense included in the Consolidated Statement of Operations for the year ended December 31, 2006:

	Twelve Months Ended December 31, 2006
Cost of goods sold	$	7,191
Sales and marketing		16,861
Research and development		14,096
General and administrative		259,114
Total share-based compensation	$	297,262

 In December 2005, the Company granted its Chairman of the Board of Directors a non-statutory stock option to purchase 300,000 shares of common stock with an exercise price of $1.46. The options were to vest with respect to 200,000 shares on June 20, 2006 and 100,000 shares on December 31, 2006, subject to completion of certain milestones. As the initial milestone had not been met as of June 30, 2006, the option to purchase 200,000 shares did not vest. The option to purchase the remaining 100,000 shares vested as of December 31, 2006. General and administrative expenses included a charge of $114,854 during the second half of 2006 related to these options.

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As of December 31, 2006, $378,763 of total unrecognized share-based compensation expense related to non-vested awards is expected to be recognized over the respective vesting terms of each award through May 2010. The weighted average term of the unrecognized share-based compensation is 3.21 years.

 In the twelve months ended December 31, 2006, no share-based compensation expense was capitalized and there were no recognized tax benefits associated with the stock-based compensation charge. The stock-based compensation charge did not significantly impact basic and diluted net loss per share in the twelve months ended December 31, 2006. During the twelve months ended December 31, 2005, no significant compensation costs related to the share-based awards to employees was recognized in the Consolidated Statement of Operations.

Stock Options

 The following table summarizes the Company’s non-vested stock option activity for the year ended December 31, 2006 :

	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested stock outstanding at December 31, 2005		124,287		$	1.40
Granted		476,001			1.40
Vested		(140,425	)		0.89
Forfeited		(70,297	)		2.29
Non-vested stock outstanding at December 31, 2006		389,566		$	1.42

 Total fair value of non-vested shares is $553,183 and $174,002 for the years ended December 31, 2006 and 2005, respectively. In addition to the above, the Company granted its Chairman of the Board of Directors a non statutory option to purchase 300,000 shares of common stock with an exercise price of $1.46. This non-statutory option is not part of any stock option plan. The total fair value of the non-vested shares is $0 and $344,558 for the years ended December 31, 2006 and 2005, respectively.

 The Company estimates the fair value of stock options using the Black-Scholes Option Pricing Model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, expected option term, expected volatility of the stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the expected annual dividend yield. The Company believes that the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the stock options granted in the twelve months ended December 31, 2006.

 No compensation cost was recognized for the employee share-based awards for the twelve months ended December 31, 2005. Had compensation cost been determined on the fair value at the grant dates, the Company’s net loss would have been the pro forma amounts indicated in the table below:

	Twelve Months Ended December 31, 2005
Net loss applicable to common stockholders as reported	$	(3,126,404	)
Effect of stock-based compensation per SFAS 123		(37,524	)
Net loss applicable to common stockholders - pro forma	$	(3,163,928	)

	Twelve Months Ended December 31,2005
Basic and Diluted:
Net loss per share as reported	$	(0.80	)
Effect of stock-based compensation per SFAS 123		(0.01	)
Net loss applicable to common stockholders - pro forma	$	(0.81	)

 For these options, the Company calculated the fair value of each option on the date of grant using the Black-Scholes Option pricing model as prescribed in SFAS No. 123 using the following assumptions:

	2006			2005
Risk-free interest		4.74	%		4.62	%
Expected life		10 Years			10 Years
Expected volatility		73	%		70	%
Expected dividend		—			—

The expected life was determined based on the options vesting period and exercise behavior of the employees.

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Activity under the Company’s stock plans for the year ended December 31, 2006 is as follows:

	Shares			Weighted -Average Exercise Price per Share		Weighted-Average Remaining Contractual Terms in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2005		475,117		$	3.21
Grants		476,001			1.40
Exercises		—
Forfeitures		(53,693	)		1.59
Expirations		(16,604	)		4.58
Outstanding at December 31, 2006		880,821		$	2.30		7.36	$	66,000
Exercisable at December 31, 2006		491,255		$	3.00		5.85	$	11,002
Vested and expected to vest at December 31, 2006		491,255		$	3.00		5.85	$	11,002

 The aggregate intrinsic value is the total pretax intrinsic value (i.e, the difference between the Company’s closing stock price on the last trading day of its fourth quarter of 2006 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options as of that date. The Company’s closing stock price on December 29, 2006 was $1.10.

Loss Per Share

 Basic net loss per share to common shareholders is calculated based on the weighted-average number of shares of common stock outstanding during the period excluding those shares that are subject to repurchase by the Company. Diluted net loss per share attributable to common shareholders would give effect to the dilutive effect of potential common stock consisting of stock options, warrants, and preferred stock. Dilutive securities have been excluded from the diluted net loss per share computations as they have an antidilutive effect due to the Company’s net loss.

 The following outstanding stock options, warrants, common stock subject to repurchase by the Company, and preferred stock (on an as-converted into common stock basis) were excluded from the computation of diluted net loss per share attributable to holders of common stock as they had an antidilutive effects of December 31, 2006 and 2005:

	2006		2005
Shares issuable upon exercise of stock options		54,818		—
Shares issuable upon exercise of warrants		398,214		573,307
Shares issuable upon conversion of redeemable convertible preferred stock		—		4,293,329
Denominator for basic and diluted calculations		453,032		4,866,63

Recent Accounting Pronouncements

 In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), which is an interpretation of SFAS No. 109, “Accounting for Income Taxes” (“SFAS 109”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company does not believe that the adoption of FIN 48 will have a significant effect on its financial statements.

 In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets-An Amendment of FASB Statement No. 140” (“SFAS 156”). SFAS 156 requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. The statement permits, but does not require, the subsequent measurement of servicing assets and servicing liabilities at fair value. SFAS 156 is effective as of the beginning of the first fiscal year that begins after September 15, 2006, with earlier adoption permitted. The Company does not believe the adoption of SFAS 156 will have a significant effect on its financial statements.

 In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company does not believe that the adoption of SFAS 157 will have a significant effect on its financial statements.

 In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of SFAS No. 159 on its financial position and results of operations.

 In September 2006, the SEC released SAB 108 “Considering the effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (SAB 108). SAB 108 addresses the process of quantifying financial statement misstatements, such as addressing both the carryover and reversing effects of prior year misstatements on the current year financial statements. SAB 108 became effective for our fiscal year ended December 31, 2006. The adoption of this statement had no impact on our financial position or results of operations.

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Overview

 As a result of the merger with Alpha CA in October 2005, we added the assets, liabilities and business and operations of Alpha CA. The financial statements reported in Item 7 below consolidate our balance sheets, but the statement of operations generally shows only Alpha CA activities. Furthermore, prior to the Merger, Alpha CA had a 100% wholly owned subsidiary in the United Kingdom (“Alpha UK”). Alpha UK suspended all operation in 2003 and was dissolved in 2005.

Comparison of the Year Ended December 31, 2006 and 2005

Revenues

Our revenues are primarily derived from sales of instruments, software, consumables, and service contracts. Revenues for the year ended December 31, 2006 increased $1,203,082, or 10.0%, from $12,050,762 for the year ended December 31, 2005, to $13,253,844 for the year ended December 31, 2006. The growth in sales from 2005 to 2006 is attributable to increased sales to our international distributors and GE Healthcare, offset in part by a decline in US domestic sales.

Revenues outside of the United States represented 43.9% of our total revenues for the year ended December 31, 2006 and 34.5% of our total revenues for the year ended December 31, 2005.The changing ratio of domestic sales to international sales from 2005 to 2006 is attributable to increased sales to our international distributors and shipments to the international distribution center for GE Healthcare, compounded by a decline in US domestic sales.

Cost of Goods Sold

Cost of goods sold includes direct material, labor and manufacturing overhead. Cost of goods sold for the year ended December 31, 2006 decreased $95,710 or 1.5%, to $6,314,064, from $6,409,774 for the year ended December 31, 2005. The decrease resulted primarily from a shift in sales to a mix of products having lower component costs during 2006. Also, there was a one-time write-off of obsolete inventory which led to higher manufacturing overhead during 2005.

Gross Profit

Gross profit for the year ending December 31, 2006 increased $1,298,792 or 23.0%, to $6,939,780, from $5,640,988 for the year ended December 31, 2006. The gross profit as a percentage of revenues increased to 52.4% from 46.8% for the year ended December 31, 2005. This was due primarily to a shift in sales to a mix of products having higher gross margins, and to lower manufacturing overhead in 2006 resulting from the one-time write off of obsolete inventory in 2005.

Sales and Marketing Expenses

Sales and marketing expenses for the year ended December 31, 2006 decreased $667,879 or 14.1%, to $4,064,723, from $4,732,602 for the year ended December 31, 2005. Sales and marketing expenses as a percentage of revenues decreased from 39.3% for the year ended December 31, 2005 to 30.7% for the year ended December 31, 2006. The decrease of sales and marketing expenses was primarily due to decrease in headcount during the third and fourth quarters which resulted in cost savings in salaries and commission. The Company also reduced advertising expenses.

Research and Development Expenses

Research and development expenses for the year ended December 31, 2006 decreased $345,693 or 22.0%, to $1,227,324 from $1,573,017 for the year ended December 31, 2005. Research and development expenses as a percentage of revenues decreased from 13.1% for the year ended December 31, 2005 to 9.3% for the year ended December 31, 2006. These decreases in research and development spending were driven by the completion in mid 2005 of the design phase of the Company’s microarray products and their subsequent launch. Also, during 2006 the Company reduced some employee and consultants work hours.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2006 increased $844,202 or 54.9%, to $2,380,836 from $1,536,634 for the year ended December 31, 2005. The general and administrative expenses as a percentage of revenues increased from 12.8% for the year ended December 2005 to 18.0% for the year ended December 31, 2006. Certain of these increased expenses related to one-time events occurring during the year ending December 31, 2006, including payment of severance to former senior executives, and recruiting fees. However, other portions of the increased costs, such as higher audit fees, legal fees, board fees, insurance expenses, and proxy related expenses reflect the increased costs of operating as a public company (results for the year ended December 31, 2005 reflect Alpha CA’s status as a private company until October 3, 2005) and are expected to continue to be incurred in the future.

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Other Income (Expense)

Interest expense for the year ended December 31, 2006 was $318,630 as compared to $307,151 for the year ended December 31, 2005. The increase in interest expense was primarily due to higher interest rates in 2006 as compared to 2005 under a line of credit and the issuance of a convertible note in July 2006.

Off-Balance-Sheet Arrangements

 As of December 31, 2006, we did not have any off-balance-sheet arrangements, as defined in Item 303(c)(2) of SEC Regulation S-B.

Liquidity and Capital Resources

From inception through December 31, 2006, Alpha CA had raised a total of $1,956,076 net of offering costs in convertible notes that were converted into redeemable convertible preferred stock in 2004, a total of $7,615,319 net of offering costs from the sale of redeemable convertible preferred stock, a total of $375,000 from the sale of a convertible note described below, and $107,137 net of offering costs from the issuance of common stock As a result of the closing of the merger with Xtrana, on October 3, 2005 Alpha CA received an additional $2,033,000 in cash. As of December 31, 2006, we had $445,656 in cash and a working capital deficit.

Our ability to generate significant revenues and maintain profitability is dependent in large part on our ability to expand our customer base, increase sales of our current products to existing customers, manage our expense growth, and enter into additional supply, license and collaborative arrangements as well as on our ability to successfully manufacture and commercialize products incorporating our technologies in new applications and in new markets. As a result of these and other factors, our independent registered public accountants, Rowbotham and Company LLP, indicated, in their report on our 2006 financial statements, that there is substantial doubt about our ability to continue as a going concern. 

At December 31, 2006, we had the following capital resources available:

·Issuance of Convertible Note - On July 21, 2006, the Company completed a private placement offering of subordinated Senior Convertible Note with the principal amount of $375,000 due in 2011 (the "Note"). The Note bears interest at a rate of 3% per year and is due on July 20, 2011. During the occurrence of an "Event of Default" under the Note, the Note will bear interest at a rate of 10% per year. The Note is convertible into shares of common stock of the Company at an initial conversion price of $1.60 per share. As of December 31, 2006, no portion of the principal amount of the note had been repaid or converted.

•Loan From Alexandria - On April 8, 2005, Alpha CA secured a loan in the amount of $1,500,000. The loan bears interest at the rate of 12.5% per annum and the outstanding principal amount of the loan is due and payable in 30 equal monthly installments of $50,000 per month ($600,000 per year) beginning on November 1, 2005. As of December 31, 2006, $700,000 of the principal had been repaid, leaving $800,000 still owing. The obligations under the loan are secured by a second priority lien and security interest in substantially all our assets.

•BFI Business Finance Line of Credit - On March 9, 2004, Alpha CA established a line of credit with BFI Business Finance (“BFI”). The interest rate is variable. As of December 31, 2006, the interest rate was 11.23 % and the outstanding balance was subject to a 0.50% per month administrative fee. The obligations under the line of credit are secured by a first priority lien and security interest in substantially all our assets.

Cash provided by (used in) operating activities was $478,500 and $(2,440,144) for the years ending December 31, 2006 and December 31, 2005, respectively. During 2006, the cash provided by operating activities was primarily due to a positive change in working capital of $636,377 offset by a net loss of $(157,877) net of adjusted non cash expenses. The non cash expense items included depreciation and amortization expense of $565,688 and imputed cost of stock based compensation of $297,262. The positive change in working capital was attributable to a positive change in inventory of $332,484 which was made to fulfill anticipated future demand resulting in an increase in accounts payable by $111,457 for purchases of certain components. Moreover, a positive change in accounts receivable of $192,448 was due to strong domestic collection in December 2006 offset by increased sales volume during December 2006 which resulted in a net decrease in accounts receivable. There was also a positive change of $120,904 in deferred revenue due to increased payments on increased system sales at year end. There was a negative change in accrued liabilities by $108,672 due to the timing of payments related to payroll and related costs. During 2005, the primary use of cash was to fund our net loss of $(1,752,877) net of adjusted non cash expenses. The non cash expense items included depreciation and amortization expense of $578,800 and compensation expense associated with warrants issued of $130,933. Also, a negative change in working capital of $687,267 resulted in a negative cash flow from operating activities of $2,440,144 during 2005.

Cash provided by (used in) investing activities was $(397,638) and $1,698,867 for the years ending December 31, 2006 and December 31, 2005, respectively. Cash was used to purchase property and equipment needed to support our operations. These amounts include costs of demonstration systems used by our sales teams and which, in some cases, are ultimately sold to customers. The Company also acquired $2,033,000 in cash as a result of the Merger in 2005.

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Cash provided by (used in) financing activities was $(180,871) and $1,246,768 for the years ending December 31, 2006 and December 31, 2005, respectively. In the year ending December 31, 2006, $375,000 was provided from issuance of a convertible note, $37,709 was provided by increased borrowing under a line of credit, $14,488 was provided from exercise of warrants, $8,068 was used to repurchase common stock, and $600,000 was used to pay down principal owing under the Alexandria loan. In the year ending December 31, 2005, $1,645,920 was provided from issuance of debt obligations, $100,000 was used to pay down principal owing under the Alexandria loan, and $300,000 was used to pay off a term loan.

 If our capital resources are unable to meet our capital requirements, we will have to raise additional funds. We may be unable to raise sufficient additional capital when we need it or to raise capital on favorable terms. The sale of equity or convertible debt securities in the future may be dilutive to our stockholders, and debt financing arrangements may require us to pledge certain assets and enter into covenants that could restrict certain business activities or our ability to incur further indebtedness and may contain other terms that are not favorable to us or our stockholders. If we are unable to obtain adequate funds on reasonable terms, we may be required to curtail operations significantly or to obtain funds by entering into financing agreements on unattractive terms.

ITEM 7. FINANCIAL STATEMENTS

Our audited financial statements for the fiscal years ended December 31, 2006 and December 31, 2005 follow Item 14 of this Annual Report on Form 10-KSB, beginning at page F-1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 8A. CONTROLS AND PROCEDURES

a) Evaluation of Disclosure Controls and Procedures. The Company carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2006, the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level to timely alerting them to material information relating to the Company required to be in our Exchange Act filings.

b) Changes in Internal Control over Financial Reporting. There were no significant changes in our internal controls over financial reporting, that occurred during our fiscal fourth quarter ended December 31, 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 8B. OTHER INFORMATION

Not applicable.

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PART III

[Certain information required by Part III is omitted from this report because the Company will file a definitive proxy statement within 120 days after the end of its fiscal year pursuant to Regulation 14A (the “Proxy Statement”) for its 2007 annual meeting of stockholders, and the information included in the Proxy Statement is incorporated herein by reference.]

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The following table sets forth information, as of March 31, 2007, regarding those individuals who serve as our directors and executive officers:

NAME	AGE	POSITION
Ronald H. Bissinger	56	Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Director
William Snider	36	Chairman of the Board
Haseeb Chaudhry	41	Vice Chairman
Michael D. Bick, Ph.D.	62	Director
James H. Chamberlain	59	Director
Nagesh Mhatre, Ph.D.	74	Director
Darryl Ray, Ph.D.	55	Director

RONALD H. BISSINGER has served as our Chief Executive Officer since September 27, 2006, and as Chief Operating Officer and Chief Financial Officer since March, 2006. Mr. Bissinger brings over 30 years experience in finance, manufacturing, business development and mergers and acquisitions to Alpha Innotech. Prior to joining the company, from 2003 to 2006, he was an independent consultant to emerging life sciences companies, including Alpha Innotech. From 2003 to 2004 Mr. Bissinger was Chief Financial Officer of Accela and from 2002 to 2003 Executive Vice President of PointBase, both of which were software companies. From 1999 to 2001 he was Chief Financial Officer of Lexar through the semiconductor company’s initial public offering on the NASDAQ, and from 1998 to 1999 was Vice President of Finance and Business Development and Chief Financial Officer of Ultradata, an enterprise software company trading on the NASDAQ. Mr. Bissinger began his career in technology development and commercialization with Exxon, General Electric and Siemens. Mr. Bissinger holds a B.S. in Chemical Engineering from Clarkson University, an M.S. in Chemical Engineering from the University of California, Berkeley, and an M.B.A. from the University of Denver.

WILLIAM SNIDER, CFA been a Director since October 2005, and is now Chairman of the Board of Directors. Mr. Snider is a general partner and co-founder of Emerging Technology Partners, LLC. Prior to ETP he was a mutual fund portfolio manager at T. Rowe Price. Mr. Snider joined T. Rowe Price in 1991 after attending the Wharton School. Shortly thereafter he became the youngest vice president and portfolio manager in the firm’s 60+ year history. His responsibilities included managing $2 billion of mutual fund and institutional client portfolios.

HASEEB CHAUDHRY co-founded Alpha CA in 1992. Mr. Chaudhry has been a Director since October 2005, and is now Vice Chairman of the Board of Directors. Mr. Chaudhry served as Chief Executive Officer of the Company from the time of the Merger until September, 2006. Mr. Chaudhry has over 15 years of experience in strategic planning, business development, sales and marketing and managing technology and application development. Prior to founding Alpha CA, Mr. Chaudhry was involved with a start-up company, American Synthesis, that sold and marketed customized oligonucleotides, reagents, chemicals and scientific instruments. He holds a B.A. degree in Genetics from the University of California, Berkeley.

MICHAEL D. BICK, PH.D., previously served as Chairman of Board of Xtrana from July 1993 until the closing of the Merger and has been a director of the combined company since October 2005. Dr. Bick also served as Chief Executive Officer of Xtrana from August 1991 until August 2000 and President from January 1996 until August 2000. In 1988, Dr. Bick founded Xtrana’s former subsidiary, MeDiTech, and was President and Chief Executive Officer thereof until it was acquired by Biopool in January 1992. Prior to that date, he was co-founder and president of a privately held medical device firm for ten years. Dr. Bick received a Ph.D. in molecular biology from the University of Southern California in 1971 and was affiliated with the Harvard Medical School and Children’s Hospital Medical Center in Boston carrying out research in human genetics from 1971 to 1974. Dr. Bick was a staff member of the Roche Institute of Molecular Biology from 1974 to 1978. Dr. Bick has served on the Board of Counselors of the School of Pharmacy, University of Southern California, is a Charter Member of the Keiretsu Forum of Southern California and a Director of VCBio.

JAMES H. CHAMBERLAIN has been a member of our Board of Directors since October 2005. He was appointed as the interim Chief Executive Officer and Chief Financial Officer of Xtrana in March 2004 and served in that position until the closing of the Merger. Since November 2000, Mr. Chamberlain has served as a director of the West Virginia University Foundation. Mr. Chamberlain founded BioSource International, Inc., a Nasdaq-listed company dedicated to the research, development, manufacturing, and marketing of biomedical products to the diagnostic and research markets, in 1989. Mr. Chamberlain retired as a director of BioSource and as its Chairman, President, and Chief Executive Officer in 2000. Prior to BioSource, Mr. Chamberlain was the Manager of Business Development for Amgen, Inc. Mr. Chamberlain also serves on the Boards of Directors of Marligen and Cerionx, both private companies in the biotechnology industry. Mr. Chamberlain received a B.S degree in biology and chemistry from West Virginia University in 1969 and completed an M.B.A. Executive Program at Pepperdine University in 1981.

17

NAGESH S. MHATRE, PH.D., has been a Director since October 2005, and was our Executive Chairman until December 2005. Dr. Mhatre is currently an executive chairman of BioImagene. Dr. Mhatre has over 40 years of senior management experience in international medical technology companies, including Miles Laboratories (Bayer AG) and Becton Dickinson & Company. While at Becton Dickinson, he served for 13 years as corporate vice president and president of its Immunocytometry Systems Division. Prior to this, he was for three years President of Becton Dickinson Laboratory Products, Europe, in Grenoble, France. At Miles Laboratories, he served for four years as managing director, Miles-Yeda, in Rehovot, Israel, a joint venture with the Weizmann Institute of Science. Dr. Mhatre has been a member of the Boards of Governors of Silicon Valley Capital Club, Heidelberg International Club, San Francisco, CA. and Friends of Weizmann Institute of Science. He serves as a Trustee on the Board of World Affairs Council, San Francisco. Dr. Mhatre is a charter member and membership chair (1998-9) of The Indus Entrepreneur-TiE Silicon Valley. Dr. Mhatre received his B.S. degree from Bombay University, India, an M.S. degree from Oregon State University and a Ph.D. degree in biochemistry/microbiology from Rutgers University.

DARRYL RAY, PH.D., co-founded Alpha CA. Dr. Ray has been a Director since October 2005, and served as Chief Operating Officer and Chief Financial Officer of the Company from the time of the Merger until March, 2006. Prior to founding Alpha CA, Dr. Ray was Director of Technical Affairs at American Synthesis, overseeing Quality Assurance of the oligonucleotides manufacturing facility and actively leading the development of a variety of new instruments for Life Sciences research. Prior to America Synthesis, Dr. Ray was involved in the development of diagnostic, R&D, and research instruments at American Bionetics (ABN) and Hoefer Scientific Instruments (now Harvard Bioscience). Dr. Ray received his B. S. degree in biology from California State Polytechnic University, Pomona and his Ph.D. degree in Cell Biology from the University of California, Santa Barbara.

Code of Ethics

We previously adopted a Code of Ethical Conduct applicable to all directors, officers and employees, and included a copy thereof as an exhibit to our 10-KSB/A filed April 28, 2004.

The remainder of this Item is incorporated by reference to the Proxy Statement.

ITEM 10. EXECUTIVE COMPENSATION

Incorporated by reference to the Proxy Statement.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Incorporated by reference to the Proxy Statement.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Incorporated by reference to the Proxy Statement.

18

ITEM 13. EXHIBITS

Number	Description
2.11	Agreement and Plan of Merger dated as of December 14, 2004
2.22	Amendment No. 1 to Agreement and Plan of Merger dated April 6, 2005
2.33	Amendment No. 2 to Agreement and Plan of Merger dated July 6, 2005
2.44	Amendment No. 3 to Agreement and Plan of Merger dated August 25, 2005
3.15	Certificate of Incorporation
3.1.15	Certificate of Amendment to Certificate of Incorporation
3.26	Bylaws
4.17	1993 Stock Incentive Plan*
4.28	2000 Stock Incentive Plan*
4.35	Amended and Restated 1999 Stock Option Plan of Alpha Innotech Corporation*
4.45	2001 Milestone Stock Option Plan of Alpha Innotech Corporation*
4.59	2006 Equity Incentive Plan*
4.65	Secured Promissory Note Issued to Alexandria Dated April 8, 2005
4.75	Loan and Security Agreement with BFI dated March 9, 2004
4.810	Form of Convertible Note Issued to ETP/FBR Venture Capital II, LLC
4.910	Form of Warrant Issued to ETP/FBR Venture Capital II, LLC
4.10	Form of Restricted Stock Award to Ronald Bissinger
10.110	Form of Securities Purchase Agreement with ETP/FBR Venture Capital II, LLC
10.25	Employment Agreement between Alpha Innotech Corporation and Haseeb Chaudhry dated May 11, 2001*

¹Incorporated by reference to our Form 8-K filed December 17, 2004

²Incorporated by reference to our Form 8-K filed April 12, 2005.

³Incorporated by reference to our Form 8-K filed July 11, 2005.

⁴Incorporated by reference to our Form 8-K filed August 26, 2005.

⁵Incorporated by reference to our Form 8-K filed October 7, 2005.

⁶Incorporated by reference to the Registrant's Registration Statement on Form S-1 (File No. 33-20584).

⁷Incorporated by reference to the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1994.

⁸Incorporated by reference to Registrant's Definitive Proxy Statement filed on June 23, 2000.

⁹Incorporated by reference to our Form S-8 filed October 19, 2006.

¹⁰Incorporated by reference to our Quarterly Report on Form 10-QSB for the quarter ending June 30, 2006 filed August 14, 2006.

19

10.35	Amendment No. 1 to Employment Agreement with Haseeb Chaudhry dated April 6, 2005*.
10.4	Agreement and General Release with Haseeb Chaudhry dated October 27, 2006*.
10.55	Employment Agreement between Alpha Innotech Corporation and Darryl Ray dated May 11, 2001*
10.65	Amendment No. 1 to Employment Agreement with Darryl Ray dated April 6, 2005.*
10.7	Agreement and General Release with Darryl Ray dated March 31, 2006*
10.811	Employee offer letter to Ronald H. Bissinger*
11.112	Statement regarding computation of per share earnings
14.113	Code of Ethics
16.114	Letter on change in certifying accountant
21.115	Subsidiaries of the small business issuer
23.1	Letter of Consent From Independent Registered Public Accounting Firm, Rowbotham & Company
24.116	Power of attorney
31.1	Rule 13a-14(a) Certification (CEO and CFO)
32.1	Section 1350 Certification (CEO and CFO)

*Management contract or compensatory plan

¹¹Incorporated by reference to our Form 8-K filed March 9, 2006.

¹²Incorporated by reference to the discussion of “Loss per Share” located in Note 1 of the consolidated financial statements for the years ended December 31, 2005 and 2004 of this report.

¹³Incorporated by reference to our Form 10-KSB/A filed April 28, 2004.

¹⁴Incorporated by reference to our Form 8-K/A filed January 11, 2006.

¹⁵Incorporated by reference to our Form 10-KSB filed March 31, 2006. 

¹⁶Incorporated by reference to Power of Attorney located on page S-1 of this report.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Incorporated by reference to the Proxy Statement.

20

Index to Consolidated Financial Statements

	Page
Alpha Innotech Corp.
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheet	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Changes in Shareholders’ Deficit	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm

To Board of Directors and Shareholders of

Alpha Innotech Corp.

We have audited the accompanying consolidated balance sheet of Alpha Innotech Corp. and subsidiaries (the “Company”) as of December 31, 2006, and the related consolidated statements of operations, changes in shareholders’ deficit, and cash flows for each of the years in the two year period then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2006, and the results of their operations and their cash flows for each of the years in the two year period then ended, in conformity with United States generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2006, the Company changed its method of accounting for stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123(R), “Share-Based Payments”.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred losses from operations, negative cash flows from operations and has both a working capital and a capital deficit at December 31, 2006, that raise substantial doubt about its ability to continue as a going concern.Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Rowbotham and Company LLP

San Francisco, California

March 30, 2007

The accompanying notes are an integral part of these consolidated financial statements.

F-2

ALPHA INNOTECH CORP.

Consolidated Balance Sheet

As of December 31, 2006

	2006
Assets
Current assets:
Cash and cash equivalents	$	445,656
Accounts receivable, net		2,189,411
Inventory, net		633,550
Prepaid expenses and other current assets		189,524
Total current assets		3,458,141
Property and equipment, net		1,048,906
Other assets		91,307
Total assets	$	4,598,354
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	1,608,286
Accrued liabilities		975,666
Current portion of debt		1,593,675
Deferred revenue		895,875
Other liabilities		210,474
Total current liabilities		5,283,976
Debt, net of current portion		489,068
Commitments and contingencies		—
Shareholders’ deficit:
Common stock, $0.01 par value per share: 50,000,000 shares authorized, 9,891,393 shares issued and outstanding		98,914
Additional paid-in capital		17,108,125
Accumulated deficit		(18,373,661	)
Treasury stock		(8,068	)
Total shareholders’ deficit		(1,174,690	)
Total liabilities and shareholders’ deficit	$	4,598,354

The accompanying notes are an integral part of these consolidated financial statements.

F-3

ALPHA INNOTECH CORP.

Consolidated Statements of Operations

For the Years Ended December 31, 2006 and 2005

	2006			2005
Revenue	$	13,253,844		$	12,050,762
Cost of goods sold		6,314,064			6,409,774
Gross profit		6,939,780			5,640,988
Operating costs and expenses:
Sales and marketing		4,064,723			4,732,602
Research and development		1,227,324			1,573,017
General and administrative		2,380,836			1,536,634
Total operating costs and expenses		7,672,883			7,842,253
Loss from operations		(733,103	)		(2,201,265	)
Other income (expense):
Interest expense		(318,630	)		(307,151	)
Other income (expense), net		53,479			13,473
Total other income (expense)		(265,151	)		(293,678	)
Net loss		(998,254	)		(2,494,943	)
Accretions on redeemable convertible preferred stock		—			(631,461	)
Net loss applicable to common shareholders	$	(998,254	)	$	(3,126,404	)
Net loss per share - basic and diluted	$	(0.10	)	$	(0.80	)
Weighted average shares outstanding - basic and diluted		9,880,221			3,888,451

The accompanying notes are an integral part of these consolidated financial statements.

F-4

ALPHA INNOTECH CORP.

Consolidated Statements of Changes in Shareholders’ Deficit

For the Years Ended December 31, 2006 and 2005

	Redeemable Convertible Preferred Stock
	Series A						Series A-1						Common Stock						Treasury Stock
	Number of Shares			Amount			Number of Shares			Amount			Number of Shares		Amount		Additional Paid-in Capital		Number of Shares		Amount			Accumulated Deficit			Total
Balance at January 1, 2005		10,533,334		$	10,273,256			7,343,418		$	2,180,733			2,648,980	$	26,490	$	1,120,455		—	$	—		$	(14,249,003	)	$	(13,102,058	)
Accretion of preferred stock to redemption value		—			21,055			—			4,224			—		—		—		—		—			(25,279	)		(25,279	)
Accretion of cumulative preferred dividend		—			474,000			—			132,182			—		—		—		—		—			(606,182	)		(606,182	)
Exercise of stock option for cash		—			—			—			—			350		3		845		—		—			—			848
Issuance of common stock warrants		—			—			—			—			—		—		130,933		—		—			—			130,933
Conversion of preferred stock		(10,533,334	)		(10,768,311	)		(7,343,418	)		(2,317,139	)		5,423,152		54,232		13,031,218		—		—			—			13,085,450
Effect of reverse merger		—			—			—			—			1,653,327		16,533		2,420,227		—		—			—			2,436,760
Net loss		—			—			—			—			—		—		—		—		—			(2,494,943	)		(2,494,943	)
Balance at December 31, 2005		—			—			—			—			9,725,809		97,258		16,703,678		—		—			(17,375,407	)		(574,471	)
Exercise of warrants		—			—			—			—			165,584		1,656		12,832		—		—			—			14,488
Repurchase of common stock		—			—			—			—			—		—		—		4,746		(8,068	)		—			(8,068	)
Issuance of common stock warrant		—			—			—			—			—		—		94,353		—		—			—			94,353
Stock based compensation		—			—			—			—			—		—		297,262		—		—			—			297,262
Net loss		—			—			—			—			—		—		—		—		—			(998,254	)		(998,254	)
Balance at December 31, 2006		—		$	—			—		$	—			9,891,393	$	98,914	$	17,108,125		4,746	$	(8,068	)	$	(18,373,661	)	$	(1,174,690	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

ALPHA INNOTECH CORP.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2006 and 2005

	2006			2005
Cash flows from operating activities:
Net loss	$	(998,254	)	$	(2,494,943	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		565,668			578,800
Allowance for sales returns and doubtful accounts		28,711			39,519
Allowance for excess and obsolete inventory		(14,025	)		(24,922	)
Provision for demo equipment		(46,825	)		15,000
Gain on disposal of property and equipment		1,165			2,736
Accretion of debt discount to interest expense		8,421			—
Warrants issued in lieu of compensation		—			130,933
Share-based compensation		297,262			—
Change in operating assets and liabilities:
Accounts receivables		192,448			(474,535	)
Inventory		332,484			(202,496	)
Prepaid expenses and other current assets		22,463			(18,950	)
Other assets		(14,982	)		3,345
Accounts payable		111,457			(145,943	)
Accrued liabilities		(108,672	)		(95,204	)
Deferred revenue		120,904			199,927
Other liabilities		(19,725	)		46,589
Net cash provided by (used in) operating activities		478,500			(2,440,144	)
Cash flows from investing activities:
Cash acquired in reverse merger		—			2,033,000
Purchase of property and equipment		(397,638	)		(334,133	)
Net cash provided by (used in) investing activities		(397,638	)		1,698,867
Cash flows from financing activities:
Proceeds from borrowing of debt obligation		37,709			1,645,920
Repayment of debt obligation		(600,000	)		(400,000	)
Proceeds from issuance of convertible notes		375,000			—
Proceeds from exercise of common stock options		—			848
Proceeds from exercise of warrants		14,488			—
Repurchase of common stock		(8,068	)		—
Net cash provided by (used in) financing activities		(180,871	)		1,246,768
Net increase (decrease) in cash and cash equivalents		(100,009	)		505,491
—
Cash and cash equivalents at the beginning of the year		545,665			40,174
Cash and cash equivalents at the end of the year	$	445,656		$	545,665

The accompanying notes are an integral part of these consolidated financial statements.

F-6

ALPHA INNOTECH CORP.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2006 and 2005

	2006		2005
Supplemental disclosures of cash flow information:
Interest paid during the year	$	318,630	$	294,321
Income taxes paid during the year	$	—	$	—
Supplemental disclosure of non-cash investing and financing activities:
Accretion of preferred stock to redemption value	$	—	$	631,461
Issuance of common stock warrant	$	94,353	$	—
Conversion of preferred stock	$	—	$	13,085,450
Elimination of Xtrana, Inc.’s loan to Alpha Innotech Corporation	$	—	$	500,000
Detail of reverse merger:
Cash	$	—	$	(2,033,000	)
Prepaid expenses		—		(23,000	)
Notes receivable from Alpha Innotech Corporation		—		(500,000	)
Accounts payable		—		26,000
Accrued liabilities		—		91,000
Other liabilities		—		2,240
Common stock issued to Xtrana, Inc.		—		2,436,760
Cash paid in 2005		—		—
Cash acquired in reverse merger		—		2,033,000
Cash acquired in reverse merger	$	—	$	2,033,000

The accompanying notes are an integral part of these consolidated financial statements.

F-7

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

1.Summary of Significant Accounting Policies

Nature of Operations - Alpha Innotech Corporation was incorporated and began operations in June 1992, in the state of California, with facilities in San Leandro, California.

Alpha Innotech Corporation had a wholly-owned subsidiary, Alpha Innotech Limited, which was located in the United Kingdom and commenced sales operation in September 2001. Alpha Innotech Limited ceased its operations in August 2003 and was legally dissolved in August 2005.

Xtrana, Inc. was incorporated in October 1987 in the state of Delaware. Xtrana, Inc. previously developed and marketed nucleic acid-based tests for use in drug discovery, detection of environmental and food contaminants, forensics and identity testing human animal diseases, genetic predisposition to disease, and other applications. In January 2004, Xtrana, Inc. sold its intellectual property and began seeking a merger candidate.

Merger - On October 3, 2005, Alpha Innotech Corporation was acquired by Xtrana, Inc. In the transactions, Alpha Innotech Corporation merged with a subsidiary of Xtrana, Inc. and became a wholly-owned subsidiary of Xtrana, Inc. Xtrana, Inc. changed its corporate name to Alpha Innotech Corp. and obtained a new trading symbol APNO.OB. The officers and board members of Xtrana, Inc. resigned and were replaced by officers of Alpha Innotech Corporation along with newly elected board members. Alpha Innotech Corporation shareholders received 8,072,482 shares of common stock of Xtrana, Inc. As a result of the transaction and subsequent stock transactions, there are 9,891,393 shares of common stock issued and outstanding.

Xtrana, Inc. assumed all outstanding Alpha Innotech Corporation’s stock option and warrants with proportionate adjustments to the number of underlying shares and exercise prices based on the following ratios:

•Preferred stock warrants to common stock warrants at an exchange ratio of .3033634 for 1

•Common stock warrants to common stock warrants at an exchange ratio of .1142909 for 1

The transaction has been treated as a reverse merger and a recapitalization of Alpha Innotech Corporation for reporting purposes.

Alpha Innotech Corp. and subsidiary (the “Company”) develops and markets both macro imaging and micro imaging systems. The macro imaging systems are used for image documentation, quantitative analysis, and image archiving. These systems are used with electrophoresis samples (gel, blots, autoradiographs, etc), microscopy applications, and general imaging from insects to culture plates. While the micro imaging systems address the micro array, multi-plex array and cell based markets. Researchers use the microimaging products to analyze slides or multi well microplates printed with genomic, proteomics or cellular samples and in some cases, fixed cell cultures.

Management’s Plan - In the past, the Company has incurred substantial losses and negative cash flows from operating activities. For the year ended December 31, 2006, the Company incurred a loss from operations of $733,103 and has a working capital deficiency and a shareholders’ deficit as of December 31, 2006. However, the Company had a net profit of $41,000 in the three months period ending December 31, 2006 and generated positive cash flows from operations of $478,500 for the year ended December 31, 2006. Furthermore, the Company completed a private placement offering of a subordinated Senior Convertible Note in the principal amount of $375,000 in July, 2006. As a result, management believes the Company has sufficient cash to fund operations in the near term.

Nevertheless, management expects operating losses to resume in the first quarter of 2007 due to increased Sales and Marketing compensation and meeting expenses, continuing high General and Administrative costs related to being a public company, and increased Research and Development costs related to the development of new products. Failure to generate sufficient revenues, raise additional capital or reduce certain discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives.

Going Concern - The accompanying consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities in the normal course of business. The Company has incurred recurring losses from operation and was unable to generate positive cash flow from operations from 1999 through 2005. However, the Company generated cash from operations in the year ending December 31, 2006 in the amount of $478,500. These conditions raise substantial doubts about the Company’s ability to continue as a going concern. The Company has been able to fund its operating losses to date primarily through the sale of preferred stock and its merger with Xtrana, Inc. The ability of the Company to manage its operating expenses to a level that can be financed by existing cash is critical to the Company’s ability to continue as a going concern. Management plans to manage expenses and obtain additional sources of cash through debt and or capital financings. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

Basis of Presentation - The accompanying consolidated financial statements have been prepared in accordance with principles generally accepted in the United States of America.

F-8

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

Principles of Consolidation - The consolidated financial statements include the financial statements of Alpha Innotech Corp. and its wholly-owned subsidiaries. All significant transactions and balances between the Company and its subsidiaries have been eliminated in consolidation.

Uses of Estimates- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Fair Value of Financial Instruments - The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to the short maturities of these instruments. The carrying fair value debt approximate fair value, as interest is tied to or approximates market rate.

Foreign Currencies- The United States dollar is the reporting currency for the Company. The functional currency used by Alpha Innotech Limited is the local currency. Assets and liabilities recorded in foreign currencies are translated at the exchange rate at the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are charged or credited to other comprehensive income.

Cash and Cash Equivalents - For purposes of reporting cash flows, the Company considers all short-term, interest-bearing deposits with original matures of three months or less to be cash equivalents. Cash and cash equivalents include money market funds and various deposit accounts.

Inventories - Inventories are stated at the lower of cost or market, cost being determined using the first-in, first out (“FIFO”) method. Reserves are established for excess or obsolete inventories.

Property and Equipment - Property and equipment are stated at cost less accumulated depreciation and are depreciated over their estimated useful lives of the related assets principally using the straight-line method: 18 months for demo and loaner equipment, 3 years for computer hardware and software, 5 to 7 years for furniture, fixture and equipment. Leasehold improvements are recorded at cost. Amortization is provided using the straight-line method over the shorter of their estimated useful lives or the term of the lease. Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in other income and expense. Maintenance and repairs are charged to operations as incurred.

Income Taxes - Income taxes are accounted for using the asset and liability approach whereby deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance for deferred taxes for which it does not consider realization of such assets to be more likely than not. At December 31, 2006, a full valuation has been established for the deferred tax assets, as management believes that it is more likely than not that a tax benefit will not be realized.

Impairment of Long-lived Assets- The Company evaluates its long-lived assets for indications of possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the future net undiscounted cash flows, which the assets are expected to generate. Should an impairment exist, the impairment would be measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the asset. There have been no such impairments of long-lived assets through December 31, 2006.

Revenue Recognition- The Company’s revenue is derived from the sale of digital imaging systems, net of returns and allowances, and is generally recognized when a contract is executed, all delivery obligations have been met, the fee is fixed and determinable, and collectibility is probable. All products are sold with a 1-year warranty agreement and the Company records an associated reserve for estimated warranty costs.

For products sold where software is deemed to be more than incidental, the Company follows Statement of Position (“SOP”)97-2, “Software Revenue Recognition,” as amended. Revenue earned on software arrangements involving multiple elements is allocated to each element based on vendor-specific objective evidence, which is based on the price charged when the same element is sold separately. When a digital imaging system is sold, the multiple elements are software and maintenance and support. Revenue allocated to software is recognized when a contract is executed, all delivery obligations have been met, the fee is fixed and determinable, and collection is probable. Revenue allocated to maintenance and support is recognized as deferred revenue when a contract is executed, all delivery obligations have been met, the fee is fixed and determinable, and collection is probable. Deferred revenue for maintenance and support is recognized ratably over the maintenance term, typically for a period of one year, beginning when a digital imaging system is considered sold or an extended maintenance and support contract is signed.

Revenue is recorded net of estimated returns. The Company’s management makes estimates of potential future product returns related to current period revenue. The Company analyzes historical returns, current economic trends and changes in its customer demand and acceptance of its product when evaluating the adequacy of its allowance for sales returns and other allowances, such as allowance for bad debts, in any accounting period. As of December 31, 2006, the Company’s allowance for sales returns was $143,453 and its allowance for doubtful accounts was $7,158.

F-9

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

Advertising Expenses - The Company expenses advertising costs as incurred. Advertising expenses for the years ended December 31, 2006 and 2005 were $ 79,541 and $ 214,063 respectively.

Research and Development - Research and development costs are charged to operations as incurred.

Software Development Costs - Software development costs are included in research and development and are expensed as incurred. After technological feasibility is established, material software development costs are capitalized until the product is available for general release. The capitalized cost is then amortized on the straight-line basis over the estimated product life, or on the ration of current revenues to total projected project revenues, whichever is greater. To date, the period between achieving technological feasibility, which the Company has defined as the establishment of a working model and the point at which the product is ready for general release has been short and software development costs qualifying for capitalization have been insignificant. Accordingly, the Company has not capitalized any software development costs.

Share-Based Employee Compensation

Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS 123R using the modified prospective transition method. Under the modified prospective transition method, prior periods are not restated for the effect of SFAS 123R. Starting with the first quarter of 2006, compensation cost includes all share-based payments granted prior to, but not vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and compensation for all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123R. The Company recognizes the fair value of its stock option awards as compensation expense over the requisite service period of each award, generally four years. Compensation expense related to stock options granted prior to January 1, 2006 and on or after January 1, 2006 is recognized on a straight-line basis.

Prior to the adoption of SFAS 123R, the Company accounted for share-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. The Company also followed the disclosure requirements of SFAS 123, “Accounting for Stock Based Compensation.” In general, as the exercise price of options granted under the Company’s plans was equal to market price of the underlying common stock on the grant date, no share-based employee compensation was recognized in the Company’s net (loss) for periods prior to the adoption of SFAS 123R.

The following table presents share-based compensation expense included in the Consolidated Statement of Operations for the year ended December 31, 2006:

	2006
Cost of goods sold	$	7,191
Sales and marketing		16,861
Research and development		14,096
General and administrative		259,114
Total share-based compensation	$	297,262

In December 2005, the Company granted its Chairman of the Board of Directors a non-statutory stock option to purchase 300,000 shares of common stock with an exercise price of $1.46. The options were to vest with respect to 200,000 shares on June 20, 2006 and 100,000 shares on December 31, 2006, subject to completion of certain milestones. As the initial milestone had not been met as of June 30, 2006, the option to purchase 200,000 shares did not vest. The option to purchase the remaining 100,000 shares vested as of December 31, 2006. General and administrative expenses included a charge of $114,854 during the second half of 2006 related to these options.

As of December 31, 2006, $378,763 of total unrecognized share-based compensation expense related to non-vested awards is expected to be recognized over the respective vesting terms of each award through May 2010. The weighted average term of the unrecognized stock-based compensation is 3.21 years.

In the twelve months ended December 31, 2006, no share-based compensation expense was capitalized and there were no recognized tax benefits associated with the share-based compensation charge. The share-based compensation charge did not significantly impact basic and diluted net loss per share in the twelve months ended December 31, 2006. During the twelve months ended December 31, 2005, no significant compensation costs related to the share-based awards to employees was recognized in the Consolidated Statement of Operations.

Stock Options

The following table summarizes the Company’s non-vested stock option activity for the year ended December 31, 2006 :

	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested stock outstanding at December 31, 2005		124,287		$	1.40
Granted		476,001			1.40
Vested		(140,425	)		0.89
Forfeited		(70,297	)		2.29
Non-vested stock outstanding at December 31, 2006		389,566		$	1.42

Total fair value of non-vested shares is $553,183 and $174,002 for the years ended December 31, 2006 and 2005, respectively. In addition to the above, the Company granted its Chairman of the Board of Directors a non statutory option to purchase 300,000 shares of common stock with an exercise price of $1.46. This non-statutory option is not part of any stock option plan. The total fair value of the non-vested shares is $0 and $438,000 for the years ended December 31, 2006 and 2005, respectively.

F-10

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

The Company estimates the fair value of stock options using the Black-Scholes Option Pricing Model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, expected option term, expected volatility of the stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the expected annual dividend yield. The Company believes that the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculation the fair values of the stock options granted in the twelve months ended December 31, 2006.

No compensation cost was recognized for the employee share-based awards for the twelve months ended December 31, 2005. Had compensation cost been determined on the fair value at the grant dates, the Company’s net loss would have been the pro forma amounts indicated in the table below:

	2005
Net loss applicable to common stockholders as reported	$	(3,126,404	)
Effect of stock-based compensation per SFAS 123		(37,524	)
Net loss applicable to common stockholders - pro forma	$	(3,163,928	)

	2005
Basic and Diluted:
Net loss per share as reported	$	(0.80	)
Effect of stock-based compensation per SFAS 123		(0.01	)
Net loss applicable to common stockholders - pro forma	$	(0.81	)

For these options, the Company calculated the fair value of each option on the date of grant using the Black-Scholes Option pricing model as prescribed in SFAS No. 123 using the following assumptions:

	2006			2005
Risk-free interest		4.74	%		4.62	%
Expected life		10 Years			10 Years
Expected volatility		73	%		70	%
Expected dividend		—			—

The expected life was determined based on the options vesting period and exercise behavior of the employees.

Activity under the Company’s stock plans for the year ended December 31, 2006 is as follows:

	Shares			Weighted -Average Exercise Price per Share		Weighted-Average Remaining Contractual Terms in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2005		475,117		$	3.21
Grants		476,001			1.40
Exercises		—
Forfeitures		(53,693	)		1.59
Expirations		(16,604	)		4.58
Outstanding at December 31, 2006		880,821		$	2.30		7.36	$	66,000
Exercisable at December 31, 2006		491,255		$	3.00		5.85	$	11,002
Vested and expected to vest at December 31, 2006		491,255		$	3.00		5.85	$	11,002

The aggregate intrinsic value is the total pretax intrinsic value (i.e, the difference between the Company’s closing stock price on the last trading day of its fourth quarter of 2006 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options as of that date. The Company’s closing stock price on December 29, 2006 was $1.10.

F-11

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

Loss Per Share- Basic net loss per share to common shareholders is calculated based on the weighted-average number of shares of common stock outstanding during the period excluding those shares that are subject to repurchase by the Company. Diluted net loss per share attributable to common shareholders would give effect to the dilutive effect of potential common stock consisting of stock options, warrants, and preferred stock. Dilutive securities have been excluded from the diluted net loss per share computations as they have an antidilutive effect due to the Company’s net loss.

The following outstanding stock options, warrants, common stock subject to repurchase by the Company, and preferred stock (on an as-converted into common stock basis) were excluded from the computation of diluted net loss per share attributable to holders of common stock as they had an antidilutive effects of December 31, 2006 and 2005:

	2006		2005
Shares issuable upon exercise of stock options		54,818		—
Shares issuable upon exercise of warrants		398,214		573,307
Shares issuable upon conversion of redeemable convertible preferred stock		—		4,293,329
Denominator for basic and diluted calculations		453,032		4,866,63

Comprehensive loss- For all periods presented, there were no differences between net loss and comprehensive loss.

Concentration of Credit Risk - Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of trade receivables and holdings of cash. The Company’s credit risk is managed by investing its cash in high-quality money market instruments. The receivables credit risk is controlled through credit approvals, credit limits, monitoring procedures, and establishment of a reserve for doubtful accounts.

Material Customers - GE Healthcare provided 19% and 6% of the Company’s revenues in the years ended December 31, 2006 and December 31, 2005, respectively. Accounts receivable owing from GE Healthcare were 36% and 16% of all Company accounts receivable at December 31, 2006 and December 31, 2005, respectively.

Segments - The Company has adopted SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information (“SFAS 131”). SFAS 131 established standards for reporting information about operating segments in financial reports issued to shareholders. It also established standards for related disclosures about products and services, geographic areas and major customers. The Company develops and markets both macro imaging and micro imaging systems. Operating segments are defined as component of the Company’s business for which separate financial information is available that is evaluated by the Company’s chief operating decision maker (its CEO) in deciding how to allocate resources and assessing performance. The Company’s only operating segment consist of sales of both macro and micro imaging systems to customers.

Recent Accounting Pronouncements - In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), which is an interpretation of SFAS No. 109, “Accounting for Income Taxes” (“SFAS 109”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company does not believe that the adoption of FIN 48 will have a significant effect on its financial statements.

In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets-An Amendment of FASB Statement No. 140” (“SFAS 156”). SFAS 156 requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. The statement permits, but does not require, the subsequent measurement of servicing assets and servicing liabilities at fair value. SFAS 156 is effective as of the beginning of the first fiscal year that begins after September 15, 2006, with earlier adoption permitted. The Company does not believe the adoption of SFAS 156 will have a significant effect on its financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fiar value and expands disclosure of fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company does not believe that the adoption of SFAS 157 will have a significant effect on its financial statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of SFAS No. 159 on its financial position and results of operations.

In September 2006, the SEC released SAB 108 “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (SAB 108). SAB 108 addresses the process of quantifying financial statement misstatements, such as addressing both the carryover and reversing effects of prior year misstatements on the current year financial statements. SAB 108 became effective for our fiscal year ended December 31, 2006. The adoption of this statement had no impact on our financial position or results of operations.

F-12

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

2.Balance Sheet Components

Accounts receivable consisted of the following at December 31, 2006:

	2006
Accounts receivable	$	2,340,022
Less allowance for sales returns		(143,453	)
Less allowance for doubtful accounts		(7,158	)
Accounts receivable, net	$	2,189,411

Inventory consisted of the following at December 31, 2006:

	2006
Raw materials	$	571,693
Inventory in transit		103,691
Less allowance for excess and obsolete inventory		(41,834	)
Inventory, net	$	633,550

Property and equipment consisted of the following at December 31, 2006:

	2006
Machinery and equipment	$	404,687
Furniture and fixtures		208,201
Leasehold improvements		1,507,500
Loaner and demonstration units		812,188
Computers		309,072
Software		90,517
Total property and equipment		3,332,165
Less accumulated depreciation and amortization		(2,283,259	)
Property and equipment, net	$	1,048,906

In 2002, the Company entered into a capital lease agreement for production equipment. As of December 31, 2006, property and equipment includes $4,756 of equipment under capital lease and accumulated amortization of assets under capital lease was $4,756.

Accrued liabilities consisted of the following at December 31, 2006:

	2006
Payroll and related costs	$	412,877
Warranty		135,773
Audit and tax accrual		56,500
Finder’s fee		175,000
Consultant and board member fees		68,930
Other		126,586
Accrued liabilities	$	975,666

F-13

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

3.Debt

Debt consisted of the following at December 31, 2006:

	2006
Alexandria Finance, LLC Term Loan	$	800,000
BFI Business Finance Line of Credit		993,675
ETP Finance Convertible Note, net of debt discount		289,068
Total debt		2,082,743
Less current portion		(1,593,675	)
Debt, net of current portion	$	489,068

ETP/FBR Venture Capital II, LLC Convertible Note - On July 21, 2006, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) between the Company and ETP/FBR Venture Capital II, LLC (the “Purchaser”), the Company completed a private placement offering of a subordinated Senior Convertible Note in the principal amount of $375,000 (the “Note”) and a warrant to purchase 125,000 shares of the Company’s common stock (the “Warrant”)(See Note 6, Common Stock). The Note bears interest at a rate of 3% per year and is due on July 20, 2011. Interest expense accrued on the note for the year ended December 31, 2006 was $5,122. During the occurrence of an "Event of Default" under the Note, the Note will bear interest at a rate of 10% per year. The Note is convertible into shares of common stock of the Company at an initial conversion price of $1.60 per share of common stock. The Note is subordinate in right of payment to the Company's existing "Senior Debt", specifically (1) Loan and Security Agreement with BFI dated March 9, 2004; and (2) the Secured Promissory Note dated April 8, 2005 and related loan documents in favor of Alexandria Finance, LLC. The Warrant is exercisable at the price of $1.20 per share. William Snider, a director of the Company, is a general partner of the Purchaser. William Snider is also a general partner of ETP/FBR Venture Capital LLC, which currently owns approximately15% of common stock of the Company.

 Maturities are as follows:

Year ending December 31:
2011		289,068
ETP/FBR Venture Capital II, LLC Convertible Note	$	289,068

Alexandria Finance, LLC Term Loan - In connection with funding of operations and sales and marketing efforts of new products and new sales channel in April 2005, the Company executed a term loan in the amount of $1,500,000 payable to Alexandria Finance, LLC. The Company issued as warrant to Alexandria Equities, LLC to purchase an aggregate of 720,000 shares of common stock with an exercise price of $0.20 per share and issued a warrant to ETP Finance Corp. to purchase an aggregate of 180,000 shares of common stock with an exercise price of $0.20 per share in association with the term loan. The loan matures in April 2008 with principal payment of $50,000 per month, starting November 2005. The interest rate applicable to the term loan is 12.5%. Interest expense on the term loan for the year ended December 31, 2006 and December 31, 2005 was $134,212 and $162,363. In accordance with the merger agreement, the Alexandria Equities, LLC warrant was replaced with a common stock warrant to purchase 82,289 shares of common stock with an exercise price of $1.75 per share and the ETP Finance Corp. warrant was replaced with a common stock warrant to purchase 20,572 shares of common stock with an exercise price of $1.75 per share.

Maturities are as follows:

Year ending December 31:
2007	$	600,000
2008		200,000
Alexandria Finance, LLC Term Loan	$	800,000

BFI Business Finance Line of Credit - In connection with funding of operations and development of new products in March 2004, the Company established a line of credit with BFI Business Finance (“BFI”), in which the Company uses its accounts receivable as collateral and obtains advances from BFI up to 80% of the Company’s accounts receivable balance at the time of the borrowing, but with principal advances not to exceed $1 million. The interest rate of the line of credit is variable, and bears interest at a rate of 3% over prime. The interest rate as of December 31, 2006 and December 31, 2005 was 11.23% and 10.22%, respectively. Interest expense on the line of credit for the years ended December 31, 2006 and December 31, 2005 was $167,633 and $118,258, respectively.

BFI Business Term Loan - In connection with funding of operations and development of new products in August 2004, the Company executed a loan in the amount of $300,000 payable to the BFI Business Finance (“BFI”). During 2005, BFI Business agreed to extend the term loan for a fee of $20,000. The term loan was repaid in 2005. Interest expense on the term loan for the years ended December 31, 2005 was $11,299.

F-14

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

4.Commitments and Contingencies

The Company rents its office facilities under an operating lease, which expires on December 2011. Under the terms of the lease, the Company is responsible for taxes, insurance and maintenance expenses. Rent expense for the years ended December 31, 2006 and 2005 was $578,500 and $579,877, respectively.

At December 31, 2006, total future minimum facility lease payments are as follows:

Year ending December 31:
2007	$	586,887
2008		598,625
2009		610,597
2010		622,809
2011		581,570
Total minimum lease obligation	$	3,000,488

Under the terms of the 2001 facility lease agreement, the Company is obligated to provide the lessor with a security deposit of $66,500, which is included in other assets.

5.Income Taxes

No provision or benefit for income taxes has been recognized for the years ended December 31, 2006 and 2005 as the Company has incurred net operating losses for tax purposes and had no loss carryback potential.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2006 and 2005 are as follows:

	2006			2005
Net operating loss carryforwards	$	3,626,096		$	3,402,884
Research and development credits		665,141			544,261
Reserves and accruals		1,191,544			1,171,141
Total		5,482,781			5,118,286
Less valuation allowance		(5,482,781	)		(5,118,286	)
Deferred taxes	$	—		$	—

The net change in the valuation allowance for the years ended December 31, 2006 and 2005 was $364,495 and $584,957, respectively. Management believes that sufficient uncertainty exists regarding the future realization of deferred tax assets, and, accordingly a full valuation allowance is required.

The difference between the expected provision for income taxes, based on the U.S. federal statutory tax rate of 34%, to the Company’s actual income tax provision, effective tax rate of 0%, relates to a full valuation allowance.

At December 31, 2006, the Company had federal and state net operating loss carryforwards of approximately $9,446,000 and $7,108,000, respectively. The federal and state net operating loss carryforwards will expire in various periods through 2026.

At December 31, 2006, the Company had federal and state research and development tax credits of approximately $665,000. The federal research and development tax credits will expire in various periods through 2026 and the California state research and development tax credits can be carried forward indefinitely.

Utilization of net operating loss carryforwards may be subject to substantial limitation due to the ownership change limitations provided by the internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses and tax credits before utilization.

6.Common Stock

Warrants for Common Stock - During 2006, the Company issued warrants to ETP Finance to purchase an aggregate of 125,000 shares of common stock with an exercise price of $1.20 per share as additional consideration for convertible notes payable in the amount of $375,000. Using the Black-Scholes pricing model and the following assumptions : estimated volatility of 87%, a contractual life of five years, a zero dividend rate, 4.99% risk free interest rate and the fair value of the common stock of $1.15 per share, the Company determined the allocated fair value of the warrants was $94,353 at the date of grant. The warrants were recorded as a discount to the convertible promissory notes. The Company accreted $8,421 to interest expense for the year ended December 31, 2006 and the remaining interest expense of $85,932 will be amortized over the term of the note which ends on July 20, 2011.

F-15

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

During 2005, the Company issued warrants to its officers to purchase an aggregate of 1,400,000 shares of common stock with an exercise price of $0.01 per share in connection with employment agreements. Using the Black-Scholes pricing model and the following assumption: estimated volatility of 70%, a contractual life of ten years, a zero dividend rate, 4.44% rate of return, and fair value of the common stock of $0.10 per share, the Company determined the allocated fair value of the warrants was $130,933 at the date of grant. This amount has been recorded as salary expense for the year ended December 31, 2005. In accordance with the merger agreement, the warrants were replaced with common stock warrants to purchase 160,007 shares of common stock with an exercise price of $0.0875 per share.

The following table summarizes information concerning outstanding and exercisable common stock warrants as of December 31, 2006:

	Common Stock Warrants Outstanding at December 31, 2006						Common Stock Warrants Exercisable at December 31, 2006
Exercise Price	Number Outstanding		Weighted Average Remaining Contractual Life In Years		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$    0.0875		432,627		4.53	$	0.0875		432,627	$	0.0875
$    1.2000		125,000		9.56	$	1.2000		125,000	$	1.2000
$    1.7500		102,861		5.27	$	1.7500		102,861	$	1.7500
$    8.5900		22,500		3.34	$	8.5900		22,500	$	8.5900
$  14.6900		5,000		3.17	$	14.6900		5,000	$	14.6900
$  18.7500		5,000		0.25	$	18.7500		5,000	$	18.7500
		692,988						692,988

The above common stock warrants remained exercisable at December 31, 2006 and will expire at various dates between March 2007 and July 2016.

Stock Option Plans - At December 31, 2006, the Company had five stock option plans (the “Plans”) for the benefit of employees, officers, directors, and consultants of the Company.

As of December 31, 2006, a total of 219,494 shares of Alpha Innotech Corp.’s common stock were reserved for issuance under two plans. Options granted under the two plans are generally exercisable for a period of ten years from the date of grant at an exercise price that is not less than the closing price of the common stock on the date of grant. Options granted under the Plans generally vest over a one- to five-year period from the date of the grant.

As of December 31, 2006, a total of 1,713,666 shares of Alpha Innotech Corporation’s common stock were reserved for issuance under three plans. Under the three plans, Alpha Innotech Corporation may issue options to purchase common stock to employees, directors and consultants. Options granted under the two plans may be incentive stock options or non-qualified stock options. Incentive stock options (“ISO”) may be granted only to Alpha Innotech Corporation employees, which include officers and directors of Alpha Innotech Corporation. Non-qualified stock options (“NSO”) may be granted to employees and consultants. Options are to be granted at an exercise price not less than fair market value for an ISO or 85% of fair value for an NSO. For individual holding more than 10% of the voting rights of all classes stock, the exercise price of an option will not be less than 110% of fair market value. Options granted under the two plans generally vest over a one- to five-year period from the date of the grant.

F-16

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

The combined stock option activity for 2006 and 2005 under the above plans was as follows:

	Shares Available For Grant			Options Outstanding			Weighted Average Exercise Price Per Share		Weighted Average Aggregate Price
Balance at January 1, 2005		416,905			518,930			3.43		1,779,994
Granted		(119,604	)		119,604			1.65		197,347
Exercised		—			(350	)		2.42		(848	)
Cancelled		65,700			(65,700	)		2.60		(170,820	)
Expired		97,367			(97,367	)		2.89		(281,391	)
Balance at December 31, 2005		460,368			475,117			3.21		1,524,282
Authorized under the 2006 Plan		1,000,000			—			—		—
Granted		(476,001	)		476,001			1.40		665,643
Exercised		—			—			—		—
Cancelled		53,693			(53,693	)		1.59		(85,198	)
Expired		14,279			(16,604	)		4.58		(76,088	)
Balance at December 31, 2006		1,052,339			880,821			2.30		2,028,639

The following information summarizes stock options outstanding at December 31, 2006:

	Common Stock Options Outstanding at December 31, 2006						Common Stock Options Exercisable at December 31, 2006
Exercise Price	Number Outstanding		Weighted Average Remaining Contractual Life In Years		Exercise Price		Number Exercisable		Exercise Price
$      0.95		60,000		9.83	$	0.95		10,002	$	0.95
$      1.35		156,792		9.38	$	1.35		22,796	$	1.35
$      1.40		29,932		3.85	$	1.40		29,932	$	1.40
$      1.50		40,000		8.93	$	1.50		40,000	$	1.50
$      1.53		208,333		9.27	$	1.53		45,833	$	1.53
$      1.66		56,403		8.34	$	1.66		20,743	$	1.66
$      1.92		8,343		8.05	$	1.92		5,285	$	1.92
$      2.30		11,000		5.60	$	2.30		11,000	$	2.30
$      2.62		100,024		5.38	$	2.62		95,670	$	2.62
$      2.89		120,006		4.19	$	2.89		120,006	$	2.89
$      3.70		49,500		5.31	$	3.70		49,500	$	3.70
$      6.60		2,000		1.83	$	6.60		2,000	$	6.60
$      7.00		6,000		5.47	$	7.00		6,000	$	7.00
$      7.81		1,500		4.25	$	7.81		1,500	$	7.81
$      9.38		200		3.05	$	9.38		200	$	9.38
$      9.40		15,663		2.42	$	9.40		15,663	$	9.40
$    10.00		6,000		3.61	$	10.00		6,000	$	10.00
$    10.30		1,500		3.61	$	10.30		1,500	$	10.30
$    11.56		4,500		1.42	$	11.56		4,500	$	11.56
$    16.87		500		3.18	$	16.87		500	$	16.87
$    23.13		2,125		0.40	$	23.13		2,125	$	23.13
$    24.38		500		1.24	$	24.38		500	$	24.38
		880,821						491,255

The weighted average remaining contractual life of outstanding options at December 31, 2006 was 7.36 years. At December 31, 2006, there were 491,255 options exercisable with a weighted average exercise prices of $2.94.

F-17

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

In addition to the above, the Company in December, 2005 granted its Chairman of the Board of Directors a nonstatutory stock option to purchase 300,000 shares of common stock with an exercise price of $1.46. The options vest with respect to 200,000 shares on June 30, 2006 and 100,000 shares on December 31, 2006, subject to completion of certain milestones. The options expire in December 2015. As the initial milestones had not been met as of June 30, 2006, options to purchase 200,000 shares did not vest. The remaining 100,000 shares were vested as of December 31, 2006.

8.Employee Benefits Plan

The Company offers the Alpha Innotech Corporation 401(k) Retirement Plan (“401(k) Plan”), a qualified voluntary contributory saving plan, available to substantially all the Company’s employees. Eligible employees may contribute up to 15% of their pretax annual compensation, up to the amount allowed pursuant to the Internal Revenue Code. In 2006 and 2005, the Company did not match its employee contribution. The Company’s cost of the 401(k) Plan for the years ended December 31, 2006 and 2005 was $0 and $0, respectively.

9.Business Segment Information

Operating segments are defined as component of the Company’s business for which separate financial information is available that is evaluated by the Company’s chief operating decision maker (its CEO) in deciding how to allocate resources and assessing performance. The Company’s only operating segment consist of sales of both macro and micro imaging systems to customers.

Revenue by geographic areas for the years ended December 31, 2006 and 2005 are as follows:

	2006		2005
United States	$	7,439,344	$	7,888,428
Asia and Pacific Rim		2,203,397		2,266,284
Europe		2,669,520		984,680
Canada		674,249		639,223
Other		267,334		272,147
Total revenue	$	13,253,844	$	12,050,762

Long-lived assets by geographic areas as of December 31, 2006 is as follows:

	2006
United States	$	1,140,213
International		—
Total long-lived assets	$	1,140,213

F-18

ALPHA INNOTECH CORP.

Notes to consolidated financial statements

10.Quarterly Financial Data (Unaudited)

The following is quarterly data for the periods presented on the consolidated statement of operations.

	For the Year Ended December 31, 2006
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Revenue	$	2,958,794		$	3,192,617		$	3,354,790		$	3,747,643
Cost of goods sold		1,507,910			1,508,802			1,503.344			1,794,008
Gross profit		1,450,884			1,683,815			1,851,446			1,953,635
Operating expenses:
Sales and marketing		982,531			1,158,046			933,044			991,102
Research and development expenses		327,228			410,245			246,256			243,595
General and administrative expenses		504,092			606,946			639,940			629,858
Total operating expenses		1,813,851			2,175,237			1,819,240			1,864,555
Loss from operations		(362,967	)		(491,422	)		32,206			89,080
Other income (expense):
Interest expense		(84,475	)		(73,620	)		(77,918	)		(82,617	)
Other income (expense), net		31,746			(10,748	)		(2,354	)		34,835
Total other income (expense)		(52,729	)		(84,368	)		(80,272	)		(47,782	)
Net loss		(415,696	)		(575,790	)		(48,066	)		41,298
Accretions on redeemable convertible preferred stock		—			—			—			—
Net loss applicable to common shareholders	$	(415,696	)	$	(575,790	)	$	(48,066	)	$	41,298
Net loss per share - basis and diluted	$	(0.04	)	$	(0.06	)	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding - basic and diluted		9,725,809			9,804,847			9,858,694			9,783,878

	For the Year Ended December 31, 2005
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Revenue	$	2,505,360		$	2,513,254		$	3,140,125		$	3,892,023
Cost of goods sold		1,405,295			1,367,733			1,716,242			1,920,504
Gross profit		1,100,065			1,145,521			1,423,883			1,971,519
Operating expenses:
Sales and marketing		1,060,509			1,367,612			1,134,053			1,170,428
Research and development expenses		397,488			409,327			358,653			407,549
General and administrative expenses		285,337			488,633			336,074			426,590
Total operating expenses		1,743,334			2,265,572			1,828,780			2,004,567
Loss from operations		(643,269	)		(1,120,051	)		(404,897	)		(33,048	)
Other income (expense):
Interest expense		(43,006	)		(118,862	)		(79,808	)		(65,475	)
Other income (expense), net		80			515			(1,481	)		14,359
Total other income (expense)		(42,926	)		(118,347	)		(81,289	)		(51,116	)
Net loss		(686,195	)		(1,238,398	)		(486,186	)		(84,164	)
Accretions on redeemable convertible preferred stock		(217,506	)		(210,487	)		(203,468	)		—
Net loss applicable to common shareholders	$	(903,701	)	$	(1,448,885	)	$	(689,654	)	$	(84,164	)
Net loss per share - basis and diluted	$	(0.34	)	$	(0.55	)	$	(0.28	)	$	(0.01	)
Weighted average shares outstanding - basic and diluted		2,649,119			2,649,294			2,476,548			7,738,433

F-19

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 30, 2007	Alpha Innotech Corp.
	/s/ Ronald H. Bissinger
	Ronald H. Bissinger
	Chief Executive Officer and Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ronald H. Bissinger, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Report on Form 10-KSB, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes may do or cause to be done by virtue hereof.

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

Signature	Title	Date
/s/ Ronald H. Bissinger	Chief Executive Officer	March 30, 2007
Ronald H. Bissinger	(Principal Executive Officer)
/s/ Ronald H. Bissinger	Chief Financial Officer	March 30, 2007
Ronald H. Bissinger	(Principal Financial and Accounting Officer)
/s/ William Snider	Chairman	March 30, 2007
William Snider
/s/ Haseeb Chaudhry Haseeb Chaudhry	Vice Chairman	March 30, 2007
/s/ Michael D. Bick, Ph. D.	Director	March 30, 2007
Michael D. Bick, Ph. D.
/s/ James H. Chamberlain	Director	March 30, 2007
James H. Chamberlain
/s/ Nagesh Mhatre, Ph. D.	Director	March 30, 2007
Nagesh Mhatre, Ph. D.
/s/ Darryl Ray, Ph. D.	Director	March 30, 2007
Darryl Ray, Ph. D.

S-1

ITEM 13. EXHIBITS

Number	Description
2.11	Agreement and Plan of Merger dated as of December 14, 2004
2.22	Amendment No. 1 to Agreement and Plan of Merger dated April 6, 2005
2.33	Amendment No. 2 to Agreement and Plan of Merger dated July 6, 2005
2.44	Amendment No. 3 to Agreement and Plan of Merger dated August 25, 2005
3.15	Certificate of Incorporation
3.1.15	Certificate of Amendment to Certificate of Incorporation
3.26	Bylaws
4.17	1993 Stock Incentive Plan*
4.28	2000 Stock Incentive Plan*
4.35	Amended and Restated 1999 Stock Option Plan of Alpha Innotech Corporation*
4.45	2001 Milestone Stock Option Plan of Alpha Innotech Corporation*
4.59	2006 Equity Incentive Plan*
4.65	Secured Promissory Note Issued to Alexandria Dated April 8, 2005
4.75	Loan and Security Agreement with BFI dated March 9, 2004
4.810	Form of Convertible Note Issued to ETP/FBR Venture Capital II, LLC
4.910	Form of Warrant Issued to ETP/FBR Venture Capital II, LLC
4.10	Form of Restricted Stock Award to Ronald Bissinger
10.110	Form of Securities Purchase Agreement with ETP/FBR Venture Capital II, LLC
10.25	Employment Agreement between Alpha Innotech Corporation and Haseeb Chaudhry dated May 11, 2001*

¹Incorporated by reference to our Form 8-K filed December 17, 2004

²Incorporated by reference to our Form 8-K filed April 12, 2005.

³Incorporated by reference to our Form 8-K filed July 11, 2005.

⁴Incorporated by reference to our Form 8-K filed August 26, 2005.

⁵Incorporated by reference to our Form 8-K filed October 7, 2005.

⁶Incorporated by reference to the Registrant's Registration Statement on Form S-1 (File No. 33-20584).

⁷Incorporated by reference to the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1994.

⁸Incorporated by reference to Registrant's Definitive Proxy Statement filed on June 23, 2000.

⁹Incorporated by reference to our Form S-8 filed October 19, 2006.

¹⁰Incorporated by reference to our Quarterly Report on Form 10-QSB for the quarter ending June 30, 2006 filed August 14, 2006.

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10.35	Amendment No. 1 to Employment Agreement with Haseeb Chaudhry dated April 6, 2005*.
10.4	Agreement and General Release with Haseeb Chaudhry dated October 27, 2006*.
10.55	Employment Agreement between Alpha Innotech Corporation and Darryl Ray dated May 11, 2001*
10.65	Amendment No. 1 to Employment Agreement with Darryl Ray dated April 6, 2005.*
10.7	Agreement and General Release with Darryl Ray dated March 31, 2006*
10.811	Employee offer letter to Ronald H. Bissinger*
11.112	Statement regarding computation of per share earnings
14.113	Code of Ethics
16.114	Letter on change in certifying accountant
21.115	Subsidiaries of the small business issuer
23.1	Letter of Consent From Independent Registered Public Accounting Firm, Rowbotham & Company
24.116	Power of attorney
31.1	Rule 13a-14(a) Certification (CEO and CFO)
32.1	Section 1350 Certification (CEO and CFO)

*Management contract or compensatory plan

¹¹Incorporated by reference to our Form 8-K filed March 9, 2006.

¹²Incorporated by reference to the discussion of “Loss per Share” located in Note 1 of the consolidated financial statements for the years ended December 31, 2005 and 2004 of this report.

¹³Incorporated by reference to our Form 10-KSB/A filed April 28, 2004.

¹⁴Incorporated by reference to our Form 8-K/A filed January 11, 2006.

¹⁵Incorporated by reference to our Form 10-KSB filed March 31, 2006.

¹⁶Incorporated by reference to Power of Attorney located on page S-1 of this report.

EX-4.10

Exhibit 4.10

FORM OF

ALPHA INNOTECH CORP.

2006 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”), dated ‹GRANT DATE› between Alpha Innotech Corp., a Delaware corporation (“Company”), and ‹EMPLOYEE›‹NAME› (the “Employee”), is entered into as follows:

WITNESSETH:

        WHEREAS, the continued participation of the Employee is considered by the Company to be important for the Company's continued growth; and

        WHEREAS, in order to give the Employee an incentive to continue in the employ of the Company and to assure his or her continued commitment to the success of the Company, the Compensation Committee of the Board of Directors of the Company or its delegates (the “Administrator”) has determined that the Employee shall be granted a stock award (“Stock Award”) covering shares of the Company's common stock (the “Shares”), subject to the restrictions stated below and in accordance with the terms and conditions of the 2006 Equity Incentive Plan (the “Plan”). Capitalized terms used but not defined in this Agreement have the meanings assigned to them in the Plan.

        THEREFORE, the parties agree as follows:

1. Grant of Stock Award. Subject to the terms and conditions of this Agreement and of the Plan, the Company hereby grants to the Employee a Stock Award covering ‹SHARES› Shares and hereby issues such Shares to the Employee.

2. Vesting Schedule. Subject to Employee's not experiencing a Termination of Employment during the following vesting term, the interest of the Employee in the Shares shall vest and become nonforfeitable as follows: ‹INSERT VESTING PROVISION HERE›. Therefore, provided the Employee has not experienced a Termination of Employment prior to the close of business on the ‹INSERT FULL VESTING DATE HERE›, the interest of the Employee in the Shares shall become fully vested and nonforfeitable onthat date.

3. Termination. In the event of the Termination of Employment of the Employee, all of the Shares held by the Employee which have not vested and which remain forfeitable as of the date of Termination of Employment shall be forfeited to the Company as of such date, without payment by the Company of any amount with respect thereto. Any forfeiture will be effected by the Company in such manner and to such degree as the Administrator, in its sole discretion, determines, and will in all events (including as to the provisions of this Section 3) be subject to Applicable Laws.

4. Transfer Restrictions.

(a)Except as otherwise provided for in this Agreement, the Shares or rights granted hereunder may not be sold, pledged or otherwise transferred until the Shares become vested and nonforfeitable in accordance with Sections 2 and 3.

1

(b)To enforce any restrictions on the Shares, the Administrator may require Employee to deposit the certificates representing the Shares, with stock powers or other transfer instruments approved by the Administrator endorsed in blank, with the Company or an agent of the Company to hold in escrow until the restrictions have lapsed or terminated. The Administrator may also cause a legend or legends referencing the restrictions be placed on the certificates during the period in which such Shares remain unvested.

5. Stockholder Rights. The Employee shall be entitled to all of the rights and benefits generally accorded to stockholders with respect to the Shares. All dividends on Shares that are subject to any restrictions, including vesting, shall be subject to the same restrictions, including those set forth in Section 2, as the Shares on which the dividends were paid.

6. Taxes.

(a) The Employee shall be liable for any and all taxes, including withholding taxes, interest and penalties, arising out of this grant, the vesting of Shares hereunder, any violation of Code Section 409A, or any other transaction or event occurring with respect to the Shares if and to the extent required by Applicable Law. In the event that the Company is required to withhold taxes at the time the Shares vest and the restrictions on the Shares lapse (or at such other time as required by applicable laws, including in connection with the filing of the Section 83(b) election described below), the Employee shall make a cash payment in an amount necessary to satisfy applicable required withholding taxes, surrender a sufficient number of whole Shares acquired under this Agreement as are necessary to satisfy the applicable minimum statutory withholding amount or satisfy the payment of the withholding taxes in a form agreed to by the Company. The Employee will receive a cash refund for any fraction of a surrendered Share not necessary for required withholding taxes. To the extent that any surrender of Shares or payment of cash or alternative procedure for such payment is insufficient, the Employee authorizes the Company, its affiliates and subsidiaries, which are qualified to deduct tax at source, to deduct all applicable required withholding taxes from the Employee's compensation. The Employee agrees to pay any amounts that cannot be satisfied from wages or other cash compensation, to the extent permitted by law. For purposes of this Agreement, the Company shall calculate any applicable income required to be recognized and withholding taxes arising in connection with the issuance or vesting of the Shares using the same method of determining fair market value of a share of its common stock as the Company uses in determining fair market value under the Plan.

(b)The Employee understands that Section 83(a) of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the difference between the amount paid for the Shares and the fair market value of the Shares as of (i) the date of issuance of the Shares in the case of vested Shares that are not subject to a substantial risk of forfeiture, and (ii) the date forfeiture restrictions on the Shares lapse. In this context, “restrictions” mean the forfeiture obligation in the event of the Termination of Employment as set forth in Sections 2 and 3 of this Agreement and the restriction on transferability as set forth in Section 4 of this Agreement. The Employee understands that the Employee may elect to be taxed as to the unvested Shares at the time such Shares are issued, based on the value of the Shares at the issuance date rather than when and as the forfeiture restrictions lapse (on the vesting dates), by filing an election under Section 83(b) (an “83(b) Election”) of the Code with the Internal Revenue Service within 30 days from the date of issuance. The Employee acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to issuance and vesting of the Shares hereunder, and does not purport to be complete. The Company has directed the Employee to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Employee may reside, the tax consequences

2

of the Employee’s death, and the decision as to whether or not to file an 83(b) Election (as well as appropriate advice and assistance with the actual filing of any such 83(b) Election) in connection with the issuance of the Shares. The Company has not provided any tax advice to the Employee in connection with the issuance of the Shares hereunder.

(c) Regardless of any action the Company takes with respect to any or all income tax, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), the Employee acknowledges and agrees that the ultimate liability for all Tax-Related Items legally due by him or her is and remains the Employee's responsibility and that the Company (i) makes no representations nor undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this issuance of Shares, including the vesting of the Shares or the subsequent sale of the Shares; and (ii) does not commit to structure the terms or any aspect of this issuance of Shares to reduce or eliminate the Employee's liability for Tax-Related Items. Prior to the vesting of the Shares, the Employee shall pay the Company any amount of Tax-Related Items that the Company may be required to withhold as a result of the Employee's receipt of Shares that cannot be satisfied by the means previously described. The Company may refuse to deliver the Shares if the Employee fails to comply with the Employee's obligations in connection with the Tax-Related Items.

(d)To the extent the Company determines that this Agreement is subject to Code Section 409A, but does not conform with the requirements thereof, the Company may at its sole discretion amend or replace the Agreement to cause the Agreement to comply with Code Section 409A.

7. Data Privacy Consent. The Employee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Employee's personal data as described in this document by and among, as applicable, the Company and its Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing the Employee's participation in the Plan. The Employee understands that the Company and its Affiliates and Subsidiaries hold certain personal information about the Employee, including, but not limited to, name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, purchased, exercised, vested, unvested or outstanding in the Employee's favor for the purpose of implementing, managing and administering the Plan (“Data”). The Employee understands that the Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Employee's country or elsewhere and that the recipient country may have different data privacy laws and protections than the Employee's country. The Employee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting the Stock Plan Administrator. The Employee authorizes the recipients to receive, possess, use,

retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Employee's participation in the Plan, including any requisite transfer of such Data, as may be required to a broker or other third party with whom the Employee may elect to deposit any Shares acquired under the Plan. The Employee understands that Data will be held only as long as is necessary to implement, administer and manage participation in the Plan. The Employee understands that he may, at any time, view Data, request additional information about the storage and processing of the Data, require any necessary amendments to the Data or refuse or withdraw the consents herein, in any case without cost, by contacting the Stock Plan Administrator in writing. The Employee understands that refusing or withdrawing consent may affect the Employee's ability to participate in the Plan. For more

3

information on the consequences of refusing to consent or withdrawing consent, the Employee understands that he or she may contact the Stock Plan Administrator at the Company.

8. Plan Information. The Employee acknowledges that the Employee has received copies of the Plan and the Plan prospectus from the Company and agrees to receive stockholder information, including copies of any annual report, proxy statement and periodic report, from the Company's website at: http://www.alphainnotech.com/corporatefiles/SEC.asp. The Employee acknowledges that copies of the Plan, Plan prospectus, Plan information and stockholder information are available upon written or telephonic request to the Stock Plan Administrator.

9. Acknowledgment and Waiver. By accepting this grant of a Stock Award, the Employee acknowledges and agrees that:

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time unless otherwise provided in the Plan or this Agreement;

(b) the grant of Stock Awards is voluntary and occasional and does not create any contractual or other right to receive future grants of Stock Awards or Shares, even if Stock Awards or Shares have been granted repeatedly in the past;

(c) the Employee's participation in the Plan shall not create a right to further employment with Employer, shall not create an employment agreement between the Employee and his or her Employer and shall not interfere with the ability of Employer to terminate the Employee's employment relationship at any time with or without cause and it is expressly agreed and understood that employment is terminable at the will of either party, insofar as permitted by law;

(d) Stock Award grants, Shares and resulting benefits are an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, and is outside the scope of the Employee's employment contract, if any; and Stock Award grants, Shares and resulting benefits are not part of normal or expected compensation or salary for any purposes, including, but not limited to calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments insofar as permitted by law;

(e) in consideration of this grant of a Stock Award, no claim or entitlement to compensation or damages shall arise from termination of this Stock Award or diminution in value of the Shares resulting from Termination of Employment by the Company (for any reason whatsoever and whether or not in breach of local labor laws) and the Employee irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by accepting the terms of this Agreement, the Employee shall be deemed irrevocably to have waived any entitlement to pursue such claim; and

(f) notwithstanding any terms or conditions of the Plan to the contrary, in the event of involuntary Termination of Employment (whether or not in breach of local labor laws), the Employee's right to receive benefits under this Agreement, if any, will terminate effective as of the date that the Employee is no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of involuntary

4

Termination of Employment (whether or not in breach of local labor laws), the Employee's right to receive benefits under this Agreement after Termination of Employment, if any, will be measured by the date of termination of the Employee's active employment and will not be extended by any notice period mandated under local law.

10. Miscellaneous.

(a) The Company shall not be required to treat as the owner of Shares, and associated benefits hereunder, any transferee to whom such Shares or benefits shall have been so transferred in violation of this Agreement.

(b) The parties agree to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Agreement.

(c) Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon delivery to the Employee at Employee’s address then on file with the Company.

(d) The Plan is incorporated herein by reference. The Plan and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Employee with respect to the subject matter hereof, and may not be modified adversely to the Employee's interest except by means of a writing signed by the Company and the Employee. This Agreement is governed by the laws of the state of Delaware. In the event of any conflict between the terms and provisions of the Plan and this Agreement, the Plan terms and provisions shall govern. Certain other important terms governing this contract are contained in the Plan.

(e) The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

(f) Shares shall not be issued pursuant to the Stock Award unless such issuance and delivery of the applicable Shares pursuant thereto shall comply with all relevant provisions of Applicable Law (including that Shares shall not be issued unless there is an effective registration statement under the Securities Act covering the issuance of the Shares, or the Company determines that a valid exemption from applicable registration requirements are available), with such compliance determined by the Company in consultation with its legal counsel. To the extent the Company is unable to or the Committee deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, the Company shall be relieved of any liability with respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

Accepted by Employee:       _________________________________ [Employee Name] ALPHA INNOTECH CORP.     By: __________________________________   Name:________________________________   Title: _________________________________

RETAIN THIS AGREEMENT FOR YOUR RECORDS

SV 2261798 v1

EX-10.4

Exhibit 10.4

AGREEMENT AND GENERAL RELEASE

For good and valuable consideration, rendered to resolve and settle finally, fully and completely all matters or disputes that now or may exist between them, the parties below enter this Agreement and General Release:

1.Parties. The parties to this Agreement are Haseeb Chaudhry, his heirs, representatives, successors and assigns (hereinafter referred to collectively as “Mr. Chaudhry”) and Alpha Innotech Corp., and/or any of its successors, subsidiaries, affiliates, parties and related companies (hereinafter referred to collectively as “Alpha Innotech”).

2.Release Of Claims By Mr. Chaudhry. In exchange for the promises contained in this Agreement and to the extent permitted by law, Mr. Chaudhry hereby waives, releases and forever discharges, and agrees that he will not in any manner institute, prosecute or pursue, any and all complaints, claims, charges, liabilities, claims for relief, demands, suits, actions or causes of action, whether in law or in equity, which he asserts or could assert, at common law or under any statute, rule, regulation, order or law, whether federal, state, or local, or on any grounds whatsoever, including but not limited to, any claims under Title VII of the 1964 Civil Rights Act, the Age Discrimination in Employment Act, the California Fair Employment and Housing Act, Government Code §12900 etseq., the California Labor Code, the Americans with Disabilities Act, the California Family Leave Act, and the Employee Retirement Income Security Act of 1974 against Alpha Innotech and any of its current or former owners, officials, directors, officers, shareholders, affiliates, agents, employee benefit plans, representatives, servants, employees, attorneys, subsidiaries, parents, divisions, branches, units, successors, predecessors, and assigns (collectively referred to as “Released Parties”) with respect to any event, matter, claim, damage or injury arising out of Mr. Chaudhry’s employment relationship with Alpha Innotech, and the termination of such employment relationship, and with respect to any other claim, matter, or event related to Mr. Chaudhry’s employment at Alpha Innotech Corporation.

3.Civil Code § 1542 Waiver. As a further consideration and inducement for this Agreement, Mr. Chaudhry hereby waives any and all rights under Section 1542 of the California Civil Code or any similar state, local, or federal law, statute, rule, order or regulation he may have with respect to Alpha Innotech and any of the Released Parties.

Section 1542 provides:

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.

Mr. Chaudhry expressly agrees that this Agreement shall extend and apply to all unknown, unsuspected and unanticipated injuries and damages as well as those that are now disclosed.

4.Outstanding Claims. As further consideration and inducement for this Agreement, Mr. Chaudhry represents that he has not filed or otherwise pursued any charges, complaints or claims of any nature which are in any way pending against Alpha Innotech or any of the Released Parties, with any local, state or federal government agency or court with respect to any matter covered by this Agreement and, to the extent permitted by law, he will not do so in the future. If any government agency or court assumes jurisdiction of any charge, complaint, cause of action or claim covered by this Agreement against Alpha Innotech or any of the Released Parties, on behalf of or related to Mr. Chaudhry, he will withdraw from and/or dismiss the matter with prejudice, as to any claims they might have. Mr. Chaudhry agrees he will not participate or cooperate in such matter(s) except as required by law.

5.Consideration for Release. In consideration of the promises contained herein, Alpha Innotech agrees that it will provide Mr. Chaudhry with the severance payment outlined in the April 6, 2005 Amendment to his May 11, 2001 Employment Agreement. Under this severance payment plan, Alpha Innotech will continue to pay Mr. Chaudhry’s salary at his current base rate of $150,000 per year paid bi-weekly (less applicable withholdings and deductions) through October 6, 2007. By signing below, Mr. Chaudhry acknowledges that he is receiving the severance payment outlined in the April 6, 2005 Amendment to his May 11, 2001 Employment Agreement (Paragraph 2.4, Termination other than for Cause, Death, Disability or Good Reason) in consideration for waiving his rights to claims referred to in this Agreement, and without such waiver, Mr. Chaudhry would not otherwise be entitled to the severance payment.

6.Additional Payments. Mr. Chaudhry understands and agrees that he will receive payment in the amount of $114,743.34 less applicable withholdings and deductions, from the Alpha Innotech Accrued Compensation Plan on or before November 30, 2006. Mr. Chaudhry further agrees that this is the entire amount to which he is entitled under the Accrued Compensation Plan.

Mr. Chaudhry understands that his rights under the Alpha Innotech Corp. Bonus Plan will continue to the extent set forth in the Alpha Innotech Corp. Bonus Plan documents.

7.Business Opportunities. The Company agrees and acknowledges that Mr. Chaudhry has informed the Company, including its Board of Directors, of his

intention to pursue business opportunities with respect to instruments, software, reagents, and related products in the Polymerase Chain Reaction (PCR) and Quantitative Polymerase Chain Reaction (QPCR) research and diagnostic markets. The Company further agrees and acknowledges that these opportunities will not compete with the Company’s business or result in the inevitable disclosure of the Company’s trade secrets, or otherwise constitute a breach of Section 4.1 of the Employee’s May 11, 2001 Employment Agreement or the April 6, 2005 Amendment thereto.

8.Time To Sign And Revoke Agreement. Mr. Chaudhry acknowledges and agrees that he was advised that he has twenty-one (21) calendar days from the date he received this Agreement to consider the terms of this Agreement. Mr. Chaudhry is advised to consult with an attorney prior to signing this Agreement.

Mr. Chaudhry also understands and has been advised that he has seven (7) calendar days to revoke his agreement hereto. He further understands that the Agreement shall not become effective and enforceable until after the passage of this seven (7) day period.

9.No Admission Of Liability. By entering into this Agreement, Alpha Innotech and all Released Parties do not admit any liability whatsoever to Mr. Chaudhry or to any other person arising out of any claims heretofore or hereafter asserted by Mr. Chaudhry, and Alpha Innotech, for itself and all Released Parties, expressly denies any and all such liability.

10.Joint Participation In Preparation Of Agreement. The parties hereto participated jointly in the negotiation and preparation of this Agreement. Accordingly, it is agreed that no rule of construction shall apply against any party or in favor of any party. This Agreement shall be construed as if the parties jointly prepared this Agreement, and any uncertainty or ambiguity shall not be interpreted against any one party and in favor of the other.

11.Attorneys’ Fees And Costs. As further mutual consideration of the promises set forth herein, Alpha Innotech and Mr. Chaudhry agree that they each are responsible for their own attorneys’ fees and costs. Each agrees that they will not seek from the other reimbursement for attorneys’ fees and/or costs incurred in this action or relating to any matters addressed in this Agreement.

12.Section Headings. Section headings in this Agreement are included for convenience of reference only and shall not be considered a part of this Agreement for any other purpose.

13.Scope Of Agreement. Mr. Chaudhry hereby affirms and acknowledges that he has read the foregoing Agreement, and that he fully understands and appreciates the meaning of each of its terms, and that it is a voluntary, full and final compromise,

release and settlement of all claims, known or unknown, with respect to the claims identified and referred to herein. The parties to this Agreement represent that this Agreement may be used as evidence in any subsequent proceeding in which any of the parties alleges a breach of this Agreement or seeks to enforce its terms, provisions or obligations.

14.Entire Agreement. This Agreement hereto constitutes the complete understanding between Mr. Chaudhry and Alpha Innotech and supersedes any and all prior agreements, promises, representations, or inducements, no matter its or their form, concerning its subject matter. No promises or agreements made subsequent to the execution of this Agreement by these parties shall be binding unless reduced to writing and signed by these parties or authorized representatives.

Dated: October 26, 2006

/s/ Haseeb Chaudhry

Haseeb Chaudhry

Dated: October 27, 2006

Alpha Innotech Corp.

By /s/ Ron Bissinger

Name Ron Bissinger

Title CEO

EX-10.7

Exhibit 10.7

AGREEMENT AND GENERAL RELEASE

For good and valuable consideration, rendered to resolve and settle finally, fully and completely all matters or disputes that now or may exist between them, the parties below enter this Agreement and General Release:

1.Parties. The parties to this Agreement are Darryl Ray, his heirs, representatives, successors and assigns (hereinafter referred to collectively as “Mr. Ray”) and Alpha Innotech Corp., and/or any of its successors, subsidiaries, affiliates, parties and related companies (hereinafter referred to collectively as “Alpha Innotech”).

2.Release Of Claims By Mr. Ray. In exchange for the promises contained in this Agreement and to the extent permitted by law, Mr. Ray hereby waives, releases and forever discharges, and agrees that he will not in any manner institute, prosecute or pursue, any and all complaints, claims, charges, liabilities, claims for relief, demands, suits, actions or causes of action, whether in law or in equity, which he asserts or could assert, at common law or under any statute, rule, regulation, order or law, whether federal, state, or local, or on any grounds whatsoever, including but not limited to, any claims under Title VII of the 1964 Civil Rights Act, the Age Discrimination in Employment Act, the California Fair Employment and Housing Act, Government Code §12900 etseq., the California Labor Code, the Americans with Disabilities Act, the California Family Leave Act, and the Employee Retirement Income Security Act of 1974 against Alpha Innotech and any of its current or former owners, officials, directors, officers, shareholders, affiliates, agents, employee benefit plans, representatives, servants, employees, attorneys, subsidiaries, parents, divisions, branches, units, successors, predecessors, and assigns (collectively referred to as “Released Parties”) with respect to any event, matter, claim, damage or injury arising out of Mr. Ray’s employment relationship with Alpha Innotech, and the termination of such employment relationship, and with respect to any other claim, matter, or event arising prior to execution of this Agreement by Mr. Ray.

3.Civil Code § 1542 Waiver. As a further consideration and inducement for this Agreement, Mr. Ray hereby waives any and all rights under Section 1542 of the California Civil Code or any similar state, local, or federal law, statute, rule, order or regulation he may have with respect to Alpha Innotech and any of the Released Parties.

Section 1542 provides:

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.

Mr. Ray expressly agrees that this Agreement shall extend and apply to all unknown, unsuspected and unanticipated injuries and damages as well as those that are now disclosed.

4.Outstanding Claims. As further consideration and inducement for this Agreement, Mr. Ray represents that he has not filed or otherwise pursued any charges, complaints or claims of any nature which are in any way pending against Alpha Innotech or any of the Released Parties, with any local, state or federal government agency or court with respect to any matter covered by this Agreement and, to the extent permitted by law, he will not do so in the future. If any government agency or court assumes jurisdiction of any charge, complaint, cause of action or claim covered by this Agreement against Alpha Innotech or any of the Released Parties, on behalf of or related to Mr. Ray, he will withdraw from and/or dismiss the matter with prejudice, as to any claims they might have. Mr. Ray agrees he will not participate or cooperate in such matter(s) except as required by law.

5.Consideration for Release. In consideration of the promises contained herein, Alpha Innotech agrees that it will provide Mr. Ray with the severance payment outlined in the April 6, 2005 Amendment to his May 11, 2001 Employment Agreement. Under this severance payment plan, Alpha Innotech will continue to pay Mr. Ray’s salary at his current base rate of $100,000 per year paid bi-weekly (less applicable withholdings and deductions) through March 9, 2007. By signing below, Mr. Ray acknowledges that he is receiving the severance payment outlined in the April 6, 2005 Amendment to his May 11, 2001 Employment Agreement (Paragraph 2.8, Termination for Good Reason) in consideration for waiving his rights to claims referred to in this Agreement, and without such waiver, Mr. Ray would not otherwise be entitled to the severance payment.

6.Additional Payments. Mr. Ray understands and agrees that he will receive payment in the amount of $114,743.34, plus interest of $1,961.64, less applicable withholdings and deductions, from the Alpha Innotech Accrued Compensation Plan on April 30, 2006. Mr. Ray agrees that the payment he will receive on April 30, 2006 is being made in a timely manner. Mr. Ray further agrees that this is the entire amount to which he is entitled under the Accrued Compensation Plan.

Mr. Ray understands that his rights under the Alpha Innotech Corporation Bonus Plan will continue to the extent set forth in the Alpha Innotech Corporation Bonus Plan documents.

7.Time To Sign And Revoke Agreement. Mr. Ray acknowledges and agrees that he was advised that he has twenty-one (21) calendar days from the date he received this Agreement to consider the terms of this Agreement. Mr. Ray is advised to consult with an attorney prior to signing this Agreement.

Mr. Ray also understands and has been advised that he has seven (7) calendar days to revoke his agreement hereto. He further understands that the Agreement shall not become effective and enforceable until after the passage of this seven (7) day period.

8.No Admission Of Liability. By entering into this Agreement, Alpha Innotech and all Released Parties do not admit any liability whatsoever to Mr. Ray or to any other person

arising out of any claims heretofore or hereafter asserted by Mr. Ray, and Alpha Innotech, for itself and all Released Parties, expressly denies any and all such liability.

9.Joint Participation In Preparation Of Agreement. The parties hereto participated jointly in the negotiation and preparation of this Agreement. Accordingly, it is agreed that no rule of construction shall apply against any party or in favor of any party. This Agreement shall be construed as if the parties jointly prepared this Agreement, and any uncertainty or ambiguity shall not be interpreted against any one party and in favor of the other.

10.Attorneys’ Fees And Costs. As further mutual consideration of the promises set forth herein, Alpha Innotech and Mr. Ray agree that they each are responsible for their own attorneys’ fees and costs. Each agrees that they will not seek from the other reimbursement for attorneys’ fees and/or costs incurred in this action or relating to any matters addressed in this Agreement.

11.Section Headings. Section headings in this Agreement are included for convenience of reference only and shall not be considered a part of this Agreement for any other purpose.

12.Scope Of Agreement. Mr. Ray hereby affirms and acknowledges that he has read the foregoing Agreement, and that he fully understands and appreciates the meaning of each of its terms, and that it is a voluntary, full and final compromise, release and settlement of all claims, known or unknown, with respect to the claims identified and referred to herein. The parties to this Agreement represent that this Agreement may be used as evidence in any subsequent proceeding in which any of the parties alleges a breach of this Agreement or seeks to enforce its terms, provisions or obligations.

13.Entire Agreement. This Agreement hereto constitutes the complete understanding between Mr. Ray and Alpha Innotech and supersedes any and all prior agreements, promises, representations, or inducements, no matter its or their form, concerning its subject matter. No promises or agreements made subsequent to the execution of this Agreement by these parties shall be binding unless reduced to writing and signed by these parties or authorized representatives.

Dated: 3/30/2006

/s/ Darryl Ray

Darryl Ray

Dated: 3/31/2006

Alpha Innotech Corporation

/s/ William Snider

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos.: 333-138098 and 333-133055) of Alpha Innotech Corp. of our report dated March 30, 2007, relating to the consolidated financial statements of Alpha Innotech Corp., appearing in this Annual Report on Form 10-KSB of Alpha Innotech Corp. for the year ended December 31, 2006.

San Francisco, California

April 2, 2007

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CEO PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14 AND 15d-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ronald Bissinger, certify that:

1. I have reviewed this annual report on Form 10-KSB of Alpha Innotech Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: March 30, 2007
	/s/ Ronald Bissinger
	Ronald Bissinger
	Chief Executive Officer and Chief Financial Officer
	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with the filing of the Annual Report on Form 10-KSB for the Year Ended December 31, 2006 (the “Report”) by Alpha Innotech Corp. (“Registrant”), the undersigned hereby certify that:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Registrant.

Dated: March 30, 2007

/s/ Ronald Bissinger

Ronald Bissinger

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)