Proposed Acquisition of Applied Imaging

SAN JOSE, Calif., Sept. 1 — Applied Imaging

Corp. (“Applied Imaging” or the “Company”) (OTC Bulletin Board: AICX), a

leading supplier of automated imaging and image analysis systems, today

announced that it had entered into a definitive agreement to be acquired by

Genetix Group plc. (“Genetix”) (AIM: GTX), the UK-based cell biology,

proteomics & genomics health technology group, in an all cash transaction

valued at $18.3 million.

Under the terms of the agreement, which is subject to approval by

Applied Imaging’s stockholders, Genetix will pay $3.06 per share to acquire

all of Applied Imaging’s common stock. The transaction is expected to close

in the fourth quarter of 2006. Aquilo Partners, Inc. acted as exclusive

financial advisor to Applied Imaging in the transaction.

Based in New Milton, Hampshire, UK, Genetix designs, develops and

manufactures innovative systems that reduce the time and cost of

introducing new biopharmaceuticals. Its products include instruments and

consumables that were used in the Human Genome Project and are now used in

the genetic analysis of human diseases — analyzing and selecting cells for

the production of therapeutic proteins. In addition to its UK headquarters,

Genetix has offices in Boston, MA and Munich, Germany.

As a result of the proposed combination, Applied Imaging and Genetix

expect to be better able to pursue growth opportunities and longer-term

strategic goals through leverage of technical, commercial and capital

resources, as well as by cross-selling of an enhanced product portfolio.

“This proposed acquisition is consistent with our strategy to broaden

and strengthen our capabilities in cell imaging and analysis. By

diversifying our product portfolio and building our US presence we will be

better able to address global growth opportunities in the drug discovery

and clinical diagnostics markets. Genetix’s cell biology instruments and

reagents complement Applied Imaging’s imaging and image analysis systems

and will help both companies to expand in the US, Europe and Asia,” said

Mark Reid, CEO of Genetix.

“Genetix’s capabilities are very complementary to those of Applied

Imaging,” added Robin Stracey, President and CEO of Applied Imaging. “We

are excited by the synergies and the prospects for enhanced competitiveness

of the combined company. We believe this is the right path for our

stockholders, our customers and our employees.”

Kirk Raab, Applied Imaging’s Chairman, commented, “This transaction

provides Applied Imaging’s stockholders with significant value. In

addition, the combined Company will have a stronger market position and

capital structure to be able to execute strategic growth initiatives.”

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