Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 28, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Entity Registrant Name | ALPHA TEKNOVA, INC. | ||
Entity Central Index Key | 0001850902 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | TKNO | ||
Title of 12(b) Security | Common Stock, par value $0.00001 per share | ||
Security Exchange Name | NASDAQ | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-40538 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 94-3368109 | ||
Entity Address, Address Line One | 2451 Bert Dr. | ||
Entity Address, City or Town | Hollister | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95023 | ||
City Area Code | 831 | ||
Local Phone Number | 637-1100 | ||
Entity Public Float | $ 58,751,616 | ||
Entity Common Stock, Shares Outstanding | 28,190,192 | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | San Jose, CA | ||
Documents Incorporated by Reference | Portions of the Registrant’s Proxy Statement relating to the 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement, or an amendment to this Annual Report on Form 10-K, will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2022. |
Statements of Operations and Co
Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 41,420 | $ 36,893 |
Cost of sales | 23,944 | 19,272 |
Gross profit | 17,476 | 17,621 |
Operating expenses: | ||
Research and development | 7,737 | 4,312 |
Sales and marketing | 9,151 | 3,777 |
General and administrative | 28,298 | 20,392 |
Amortization of intangible assets | 1,148 | 1,148 |
Goodwill impairment | 16,613 | 0 |
Long-lived assets impairment | 4,188 | |
Total operating expenses | 67,135 | 29,629 |
Loss from operations | (49,659) | (12,008) |
Other income (expenses), net | ||
Interest income (expense), net | 213 | (589) |
Other expense, net | 55 | (40) |
Total other income (expenses), net | 268 | (629) |
Loss before income taxes | (49,391) | (12,637) |
Benefit from income taxes | (1,923) | (2,834) |
Net income (loss) | (47,468) | (9,803) |
Change in unrealized loss on available-for-sale securities, net of tax | (7) | |
Comprehensive loss | $ (47,468) | $ (9,810) |
Earnings Per Share [Abstract] | ||
Basic | $ (1.69) | $ (0.61) |
Diluted | $ (1.69) | $ (0.61) |
Earnings Per Share, Diluted, Other Disclosure [Abstract] | ||
Basic | 28,083,563 | 16,087,653 |
Diluted | 28,083,563 | 16,087,653 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 42,236 | $ 87,518 |
Accounts receivable, net of allowance for doubtful accounts of $22 thousand and $23 thousand | 4,261 | 4,666 |
Inventories, net | 12,247 | 5,394 |
Income taxes receivable | 22 | 1,188 |
Prepaid expenses and other current assets | 2,374 | 2,438 |
Total current assets | 61,140 | 101,204 |
Property, plant and equipment, net | 51,577 | 29,810 |
Operating lease right-of-use assets | 19,736 | 0 |
Goodwill | 0 | 16,613 |
Intangible assets, net | 17,556 | 18,704 |
Other non-current assets | 2,252 | 180 |
Total assets | 152,261 | 166,511 |
Current liabilities: | ||
Accounts payable | 2,449 | 2,248 |
Accrued liabilities | 6,203 | 5,495 |
Current portion of operating lease liabilities | 2,223 | 0 |
Total current liabilities | 10,875 | 7,743 |
Deferred tax liabilities | 1,223 | 3,153 |
Other accrued liabilities | 191 | 273 |
Long-term debt | 21,976 | 11,870 |
Deferred rent | 0 | 269 |
Long-term operating lease liabilities | 18,111 | 0 |
Total liabilities | 52,376 | 23,308 |
Stockholders’ equity: | ||
Preferred stock, $0.00001 par value, 10,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively, zero shares issued and outstanding at December 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.00001 par value, 490,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively, 28,179,423 and 28,012,017 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 0 | 0 |
Additional paid-in capital | 154,891 | 150,741 |
Accumulated deficit | (55,006) | (7,538) |
Total stockholders’ equity | 99,885 | 143,203 |
Total liabilities, convertible and redeemable preferred stock and stockholders’ equity | $ 152,261 | $ 166,511 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Allowance for doubtful accounts | $ 22 | $ 23 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 490,000,000 | 490,000,000 |
Common stock, shares issued | 28,179,423 | 28,012,017 |
Common stock, shares outstanding | 28,179,423 | 28,012,017 |
Statements of Convertible and R
Statements of Convertible and Redeemable Preferred Stock and Stockholders' Equity - USD ($) $ in Thousands | Total | Convertible and Redeemable Preferred Stock [Member] | Preferred Stock [Member] Convertible and Redeemable Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings (Accumulated Deficit) [Member] |
Beginning Balance at Dec. 31, 2020 | $ 16,767 | $ 35,638 | $ 14,495 | $ 7 | $ 2,265 | ||
Beginning Balance (in shares) at Dec. 31, 2020 | 9,342,092 | 3,599,232 | |||||
Stock-based compensation | 1,551 | 1,551 | |||||
Unrealized loss on available-for-sale securities | (7) | (7) | |||||
Accretion of convertible and redeemable preferred stock to redemption value | (300) | $ (300) | (300) | ||||
Conversion of convertible and redeemable preferred stock | 35,938 | $ (35,938) | 35,938 | ||||
Conversion of convertible and redeemable preferred stock (in shares) | (9,342,092) | 17,512,685 | |||||
Issuance of common stock upon initial public offering, net of issuance costs and underwriting discounts | 99,057 | 99,057 | |||||
Issuance of common stock upon initial public offering, net of issuance costs and underwriting discounts (in shares) | 6,900,000 | ||||||
Issuance of stock under employee stock plans, net, Shares | 100 | ||||||
Net income (loss) | (9,803) | (9,803) | |||||
Ending Balance at Dec. 31, 2021 | $ 143,203 | 150,741 | (7,538) | ||||
Ending Balance (in shares) at Dec. 31, 2021 | 28,012,017 | 28,012,017 | |||||
Stock-based compensation | $ 3,711 | 3,711 | |||||
Accretion of convertible and redeemable preferred stock to redemption value | 0 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 118,900 | ||||||
Issuance of common stock upon exercise of stock options | 145 | 145 | |||||
Issuance of common stock under employee stock purchase plan (In Share) | 48,506 | ||||||
Issuance of common stock under employee stock purchase plan | 294 | 294 | |||||
Net income (loss) | (47,468) | (47,468) | |||||
Ending Balance at Dec. 31, 2022 | $ 99,885 | $ 154,891 | $ (55,006) | ||||
Ending Balance (in shares) at Dec. 31, 2022 | 28,179,423 | 28,179,423 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities: | ||
Net income (loss) | $ (47,468) | $ (9,803) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Bad debt expense | 25 | 235 |
Inventory reserve | 697 | 441 |
Depreciation and amortization | 3,165 | 2,883 |
Stock-based compensation | 3,711 | 1,551 |
Deferred taxes | (1,930) | (2,837) |
Amortization of debt financing costs | 278 | 134 |
Non-cash lease expense | 329 | 65 |
Loss on disposal of property, plant and equipment | 326 | 41 |
Goodwill impairment | 16,613 | 0 |
Long-lived assets impairment | 4,188 | |
Other | (10) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 380 | (278) |
Inventories | (7,550) | (2,253) |
Income taxes receivable | 1,166 | 229 |
Prepaid expenses and other current assets | 64 | (1,301) |
Other non-current assets | (2,072) | (156) |
Accounts payable | 572 | 270 |
Accrued liabilities | 188 | 1,810 |
Other | (82) | (90) |
Cash used in operating activities | (27,400) | (9,069) |
Investing activities: | ||
Purchase of property, plant and equipment | (28,149) | (19,877) |
Proceeds from loan to related party | 0 | 529 |
Proceeds on sales of short-term marketable securities | 0 | 1,132 |
Proceeds from maturities of short-term marketable securities | 0 | 695 |
Cash used in investing activities | (28,149) | (17,521) |
Financing activities: | ||
Proceeds from long-term debt | 10,135 | 11,889 |
Payment of debt issuance costs | (172) | (153) |
Payment of exit fee costs | (135) | 0 |
Payment of issuance costs for initial public offering | 0 | (3,615) |
Proceeds from initial public offering, net of underwriters' commissions and discounts | 0 | 102,672 |
Proceeds from exercise of stock options | 145 | 0 |
Proceeds from issuance of common stock under employee stock purchase plan | 294 | 0 |
Cash provided by financing activities | 10,267 | 110,793 |
Change in cash and cash equivalents | (45,282) | 84,203 |
Cash and cash equivalents at beginning of period | 87,518 | 3,315 |
Cash and cash equivalents at end of period | 42,236 | 87,518 |
Supplemental cash flow disclosures: | ||
Income taxes paid | 0 | 8 |
Interest paid, net of amounts capitalized | 101 | 414 |
Capitalized property, plant and equipment included in accounts payable and accrued liabilities | 2,237 | 2,088 |
Conversion of convertible and redeemable preferred stock into common stock | 0 | 35,638 |
Accretion of convertible and redeemable preferred stock to redemption value | 0 | 300 |
Recognition of operating right-of-use lease asset | 22,094 | 0 |
Recognition of operating lease liabilities | $ 22,363 | $ 0 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Note 1. Nature of the Business Alpha Teknova, Inc. (referred to herein as the Company or Teknova), produces critical reagents for the research, discovery, development, and commercialization of novel therapies, vaccines, and molecular diagnostics. Product offerings include pre-poured media plates for cell growth and cloning; liquid cell culture media and supplements for cellular expansion; and molecular biology reagents for sample manipulation, resuspension, and purification. Teknova supports customers spanning the life sciences market, including pharmaceutical and biotechnology companies, contract development and manufacturing organizations, in vitro diagnostic franchises, and academic and government research institutions, with catalog and custom, made-to-order products. Teknova manufactures its products at its Hollister, California headquarters and stocks inventory of raw materials, components, and finished goods at that location. The Company ships products directly from its warehouse in Hollister, California. Stock Split In June 2021, the Company’s board of directors and stockholders, respectively, approved a 1.8746 for-one forward stock split of the Company’s issued and outstanding shares of common stock, including the shares of common stock underlying outstanding stock options. This stock split was effectuated on June 17, 2021. The par value of the Company’s common stock was not adjusted as a result of the stock split. All issued and outstanding share and per share amounts of the Company’s common stock and stock options included in the accompanying financial statements have been retroactively adjusted to reflect this stock split for all periods presented. Initial Public Offering On June 29, 2021, the Company completed its initial public offering (IPO) in which the Company issued and sold 6,900,000 shares of its common stock, including shares issued upon the exercise in full of the underwriters’ option to purchase 900,000 additional shares of its common stock, at a public offering price of $ 16.00 per share. The Company received $ 99.1 million in net proceeds, after deducting underwriting discounts and commissions of $ 7.7 million and offering expenses of $ 3.6 million. On June 28, 2021, all outstanding shares of convertible and redeemable preferred stock were converted into 17,512,685 shares of the Company’s common stock. Prior to the conversion of preferred stock to the Company’s common stock, total accretion of $ 0.3 million related to costs associated with the issuance of the convertible and redeemable preferred stock was recognized as an increase to the carrying value from $ 35.6 million to $ 35.9 million. Subsequent to the closing of the IPO, there were no shares of convertible and redeemable preferred stock outstanding. Prior to the IPO, deferred offering costs, which consist primarily of direct incremental legal, accounting, and consulting fees relating to the Company’s IPO, were capitalized within prepaid expenses and other current assets in the balance sheets. Upon the closing of the IPO, these costs were reclassified into additional paid-in capital, as an offset against IPO proceeds. As of December 31, 2021, $ 3.6 million of these IPO-related costs were included as a reduction to additional paid-in capital on the balance sheet. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The accompanying financial statements and related notes are prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain amounts of assets and liabilities, and disclosures of assets and liabilities, at the date of each financial statement, and the reported amount of revenues and expenses during the reporting period. Significant items that are subject to such estimates and assumptions include, but are not limited to, the valuation of share-based payment awards, impairment of long-lived assets, impairment of goodwill and intangible assets, and income taxes. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or cond itions. Going Concern These financial statements and accompanying notes have been prepared in accordance with the provisions of Accounting Standards Codification (ASC) 205-40, Presentation of Financial Statements—Going Concern , on the basis that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has incurred operating losses in the past and expects to incur operating losses in the near to medium-term. We have incurred net losses of $ 47.5 million and $ 9.8 million in the years ended December 31, 2022 and 2021, respectively, and have an accumulated deficit of $ 55.0 million as of December 31, 2022. As of December 31, 2022, we had $ 50.3 million in working capital, which included $ 42.2 million in cash and cash equivalents. In addition to our existing cash and cash equivalents balance, another source of liquidity is our credit facility as described below Note 10. Long-term Debt, Net. We believe that our existing cash and cash equivalents as of December 31, 2022, together with our credit facility under the Amended Credit Agreement, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. Our principal liquidity requirements are to fund our operations and capital expenditures. We may, however, require or elect to secure additional financing as we continue to execute our business strategy. If we require or elect to raise additional funds, we may do so through equity or debt financing, which may or may not be available on favorable terms and could require us to agree to covenants that limit our operating flexibility. Segment Reporting Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance. Teknova’s CODM is its Chief Executive Officer, currently Stephen Gunstream. Teknova has determined that it operates in one reporting unit, one operating segment, and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Concentrations of Credit Risk Teknova’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash with high-quality banking institutions. At times, the Company’s cash balances may exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit. Teknova's cash equivalents consist primarily of money market funds invested in U.S. Treasuries. Teknova extends credit to customers based on its evaluation of the customer's financial condition and routinely communicates with its customers regarding payments. The Company has a history of limited write-offs, and therefore believes that its accounts receivable credit risk exposure is low. For information regarding the Company’s significant customers and suppliers, see Note 4. Cash and Cash Equivalents Teknova’s cash and cash equivalents include cash on hand, cash held in banks, and highly-liquid investments with maturities of three months or less at the date of acquisition. Teknova maintains its cash in bank deposit accounts in financial institutions that are insured by the FDIC up to a balance of $ 250.0 thousand. Cash equivalents are stated at amortized cost, plus accrued interest, which approximates fair value. Fair Value of Financial Instruments The carrying amounts of certain of Teknova’s financial instruments, including cash equivalents, accounts receivable, inventories, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Accounts Receivable Accounts receivable are stated at invoice value, less estimated allowances for doubtful accounts. Teknova uses the allowance method to account for uncollectible accounts receivable, calculated by management using the historical average of uncollectible accounts. The Company continually monitors its customer payments and maintains an allowance for estimated losses resulting from its customers’ inability to make required payments. Accounts receivable are considered past due once customer payment terms have been exceeded. Receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Inventories Inventory, consisting of raw materials, work in process and finished goods, is stated at the lower of cost or net realizable value, on a first-in, first-out basis. Teknova writes down its inventory for estimated obsolescence or inventory in excess of reasonably expected near-term sales or unmarketable inventory, in an amount equal to the difference between the cost of inventory and the estimated net realizable value, based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by Teknova, additional inventory write-downs may be required. Inventory impairment charges establish a new cost basis for inventory, and charges are not reversed subsequently to income, even if circumstances later suggest that increased carrying amounts are recoverable. Capitalized Software Implementation Costs Teknova capitalizes certain implementation costs incurred under a cloud computing hosting arrangement. Costs incurred during the application development stage related to the implementation of the hosting arrangement are capitalized and included within other assets on the accompanying balance sheets. Amortization of capitalized implementation costs is recognized on a straight-line basis over the expected term of the associated hosting arrangement when it is ready for its intended use. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. As of December 31, 2022 and 2021, Teknova had capitalized software implementation costs of $ 2.2 million and $ 0.1 million, respectively. Amortization expense related to capitalized implementation costs for the year ended December 31, 2022 was $ 0.1 million. No amortization expense related to capitalized implementation costs was recorded for the year ended December 31, 2021 as the underlying implementation activities were not complete. Property, Plant, and Equipment Teknova records property, plant, and equipment at fair value when it is acquired in a business combination or at cost for all other purchases of property, plant, and equipment. Property, plant, and equipment is depreciated over the estimated useful lives of the assets, using the straight-line method. Any leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the estimated remaining life of the lease. Costs for repairs and maintenance that do not significantly increase the value or estimated lives of property, plant, and equipment are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheets, and the resulting gain or loss is reflected in the statements of operations and comprehensive loss. The estimated useful lives of the major classes of property and equipment are as follows: Estimated Useful Lives Machinery and equipment 5 – 15 years Office furniture and equipment 3 – 7 years Vehicles 5 years Leasehold improvements 3 – 15 years Impairment of Long-Lived Assets Teknova evaluates its long-lived assets for impairment when events or changes in circumstances indicate a possible inability to recover carrying amounts. Recoverability is assessed by comparing the carrying value of the assets to estimated undiscounted future cash flows expected to be generated by the assets. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated during the life of those assets are less than the assets’ carrying amounts. If an asset is impaired, the loss is measured as the amount by which the asset’s carrying value exceeds its fair value. For the fiscal year ended December 31, 2022, the Company recorded impairments of its long-lived assets, see Note 6. Property, Plant, and Equipment, Net. There were no indicators of impairment during the year ended December 31, 2021. Goodwill Goodwill is the excess of the Company’s fair value over the Company’s fair value accounting basis of the Company’s net assets and liabilities. Goodwill is not amortized, but is tested for impairment annually as of October 1, or more frequently if events or circumstances indicate that the carrying value may no longer be recoverable and that an impairment may have occurred. Teknova first considers qualitative factors that indicate whether impairment may have occurred. Such indicators may include, macro-economic conditions, such as adverse industry or market conditions and entity-specific events, such as increasing costs, declining financial performance, or loss of key personnel. If the Company’s assessment of such qualitative factors indicates that a reduction in the carrying value is more likely than not to have occurred, Teknova performs a quantitative assessment, comparing the fair value of the Company (in this capacity, the Reporting Unit) to the carrying value, including goodwill, of the Reporting Unit. If the carrying value of the Reporting Unit exceeds its fair value, an impairment has occurred, and an impairment charge is recognized for the difference up to the carrying value of the Reporting Unit’s goodwill. The fair value of the Reporting Unit is a Level 3 measure and is determined using a market and income approach. For the fiscal year ended December 31, 2022, the Company fully impaired its goodwill, see Note 8. Goodwill and Intangible Assets, Net. There was no impairment of goodwill during the year ended December 31, 2021. Intangible Assets Teknova’s intangible assets consist of the Teknova trade name and the Company's customer relationships. Indefinite-lived intangible assets are not amortized but are tested for impairment at least annually as of October 1, or more frequently if events or circumstances indicate that it is more likely than not that an asset is impaired. If the fair value of the asset is less than its carrying amount, an impairment charge would be recognized in an amount equal to the difference between the carrying amount and the fair value. Finite-lived intangible assets are amortized over the estimated economic useful lives of the assets, which is the period during which expected cash flows support the fair value of such intangible assets. Teknova reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or an asset group may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related assets’ or asset group’s carrying value. There was no impairment of intangible assets during the years ended December 31, 2022 and 2021. Leases The Company determines if an arrangement is an operating lease at a lease's inception. Leases with an initial term of 12 months or fewer are not recorded on the balance sheet. All other operating leases are recorded on the balance sheet with a corresponding operating lease asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants. Operating lease assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when such options are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate, adjusted for the lease term, based on the information available at the lease commencement or modification date as required. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term. Debt Issuance Costs Debt issuance costs represent legal, consulting, and other financial costs associated with debt financing and are presented on the balance sheets as a direct reduction from the carrying amount of the related debt instrument. Debt issuance costs on the term debt are amortized to interest expense over the term of the applicable debt agreement using the effective interest rate method. Revenue Recognition We account for revenue in accordance with ASC 606, Revenue From Contracts With Customers . Teknova recognizes revenue for sales of goods through the following steps: ▪ Identification of the contract, or contracts, with a customer, typically a purchase order ▪ Identification of the performance obligations in the contract ▪ Determination of the transaction price ▪ Allocation of the transaction price to the performance obligations in the contract ▪ Recognition of revenue when, or as, the company satisfies a performance obligation Teknova recognizes revenue from the sale of manufactured products and services when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when control is transferred to the customer. Teknova’s sales are made directly to customers or through distributors, generally under agreements with payment terms typically shorter than 90 days and, in no case exceeding one year. Therefore, Teknova’s contracts do not contain a significant financing component. Sales, value add, and other taxes collected concurrent with revenue are excluded from sales. The Company records amounts billed to customers for shipping and handling in a sales transaction as revenue. Shipping and handling costs are included in general and administrative expenses as revenue is recognized. Shipping and handling costs for the years ended December 31, 2022 and 2021 were $ 1.4 million and $ 1.1 million, respectively. Occasionally, Teknova offers rebates, discounts, and returns on its products, however returns and refunds occur rarely. The Company records rebates, discounts, and returns at the time they occur. The difference between recording these as they occur and estimating the amount of consideration in exchange for the transfer of promised goods would not have a material impact on the financial statements. Costs incurred to obtain contracts with customers are expensed immediately, because the amortization period for such costs is one year or less. Cost of Sales Cost of sales includes salaries, wages and benefits, raw materials consumption (including direct and indirect material), depreciation, utilities, rent, manufacturing supplies, and other production overhead. Research and Development Expenses The Company’s research and development expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for personnel in process engineering and product development functions, expenses related to occupancy costs, laboratory supplies, consulting fees, and depreciation associated with various assets used in the research and development of the Company’s products and processes. Sales and Marketing Expenses The Company’s sales and marketing expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for sales and marketing employees, expenses related to occupancy costs, brand strategy, website, content and collateral. The Company expenses advertising costs as incurred. Advertising expense for the years ended December 31, 2022 and 2021 were no t significant and $ 0.4 million, respectively, and are included in s ales and marketing expenses. General and Administrative Expenses The Company’s general and administrative expenses primarily consist of costs associated with executive and administrative staff, and other expenses such as shipping charges, professional service fees, occupancy costs, IT systems, insurance, depreciation, and stock-based compensation expense for executive and administrative staff. Stock-Based Compensation Teknova measures and recognizes compensation expense for all stock-based awards, including stock options, restricted stock units, and stock purchase rights granted under the Employee Stock Purchase Plan (ESPP) to employees, based on the estimated fair value of the awards on the date of grant. The fair value of each stock option granted and employee stock purchase rights are estimated using the Black-Scholes option-pricing model, which requires the Company to make a number of assumptions, including expected volatility, the expected risk-free interest rate, the expected term, and the expected dividend. The fair value of each restricted stock unit is based on the fair value of the Company’s common stock on the date of grant. Stock-based compensation expense is recognized over the requisite service period of the award, which generally represents the scheduled vesting period. Forfeitures are recognized as they occur. Employee Benefit Plans Teknova has a salary deferral 401(k) plan (the 401(k) Plan) covering substantially all employees. Contrib utions by the Company to the 401(k) Plan for the years ended December 31, 2022 and 2021 were $ 0.6 million and $ 0.6 million, respectively. Contributions payable as of December 31, 2022 and 2021, of $ 0.1 million and $ 0.3 million, respectively, are included within accrued liabilities in the accompanying financial statemen ts. Income Taxes Teknova uses the asset and liability method in accounting for its deferred income taxes. Under this method, deferred income taxes are provided for differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes, using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates on the date of enactment. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be realized. Teknova accounts for unrecognized tax benefits based upon its assessment of whether tax benefits are more likely than not to be sustained upon examination by tax authorities. The Company reports a liability for unrecognized tax benefits taken, or expected to be taken, in a tax return and recognizes associated interest and penalties, if any, in income tax expense. Unrecognized tax benefits as of December 31, 2022 and 2021, were not significant. Net Loss Per Share of Common Stock Basic net income (loss) per share is computed using the two-class method. Diluted net income (loss) per share is computed using the more dilutive of (i) the treasury stock method or if-converted method, or (ii) the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The treasury stock method uses the number of new shares that may be created by unexercised in-the-money options, where the exercise price is less than the current share price. The if-converted method calculates the value of convertible securities as if they were converted into new shares. Per share amounts are computed by dividing net income (loss) by the weighted average shares outstanding during each period. The diluted net income (loss) per share is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. Recently Adopted Accounting Pronouncements Effective January 1, 2022, the Company adopted ASU No. 2016-02, Leases (Topic 842) using the modified retrospective approach, applied at the beginning of the period of adoption, and elected the package of transitional practical expedients. The adoption of this standard resulted in recording operating right-of-use lease assets of $ 20.3 million, which included reclassifying approximately $ 0.2 million of deferred rent as a component of the operating lease asset as of January 1, 2022. The adoption also resulted in recording operating lease liabilities of $ 20.5 million as of January 1, 2022. The standard did not have an impact on the statements of operations and cash flows. Refer to Note 7. Leases herein for additional information pertaining to the adoption of the new standard. Effective January 1, 2022, the Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removed certain exceptions to the general principles in ASC 740 and clarified and amended certain guidance to promote consistent application. The adoption of this standard did not have a significant impact on the Company's financial statements. Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326). The standard introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses and will apply to accounts receivable. The new guidance will be effective for Teknova’s annual and interim periods beginning after December 15, 2022. Teknova is currently evaluating the impact of the adoption of the standard on the financial statements and does not anticipate the standard to have a significant impact. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 3. Revenue Recognition Teknova has two primary product categories: Lab Essentials and Clinical Solutions. Previously, the Company had a third product category, Sample Transport, which it ceased producing in 2021. Lab Essentials Teknova is a leader in providing highly complex chemical formulations for use in biological research and drug discovery. The Company's core research products consist of commonly used, catalog solutions and customer-specified formulations. During discovery, the Company's products are used regularly in small, bench-scale experiments. As customers optimize their processes and begin to scale up in volume, they tend to order more custom products. The Lab Essentials portion of Teknova's business includes: pre-poured media plates for cell growth and cloning; liquid cell culture media and supplements for cellular expansion; and molecular biology reagents for sample manipulation, resuspension, and purification. Teknova's Lab Essentials products include essential formulations for common research applications and highly customized formulations for customer-specific applications in genomics and bioproduction. Clinical Solutions In 2017, Teknova achieved ISO 13485:2016 certification, enabling the Company to meet the quality system regulation of products for use as components in diagnostic and therapeutic products manufactured by the Company's customers. Teknova believes that its Clinical Solutions products are used in the production of protein therapies, gene therapies, mRNA vaccines, and diagnostic kits. The Clinical Solutions portion of our business includes: liquid cell culture media and supplements for cellular expansion and molecular biology reagents for sample manipulation, resuspension, and purification. Sample Transport In 2020, Teknova developed and commercialized a suite of sample collection and transport reagents to aid in sample processing for COVID-19 testing. Subsequently, demand for COVID-19 testing declined significantly while the market supply of sample transport medium grew. As a result, in 2021, the Company decided to cease production of transport medium and no longer markets those reagents. Teknova’s revenue, disaggregated by product category, for the years e nded December 31, 2022 and 2021 was follows (in thousands): For the Year Ended December 31, 2022 2021 Lab Essentials $ 31,772 $ 27,184 Clinical Solutions 8,445 6,793 Sample Transport 6 1,530 Other 1,197 1,386 Total revenue $ 41,420 $ 36,893 Teknova’s revenue, disaggregated by geographic region, for the years ended December 31, 2022 and 2021 was follows (in thousands): For the Year Ended December 31, 2022 2021 United States $ 40,103 $ 35,808 International 1,317 1,085 Total revenue $ 41,420 $ 36,893 |
Concentrations of Risk
Concentrations of Risk | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value, Concentration of Risk, Financial Assets, Balance Sheet Groupings [Abstract] | |
Concentrations of Risk | Note 4. Concentrations of Risk Customers Customers who accounted for 10% or more of the Company's revenues and outstanding balance of accounts receivable were: For the Year Ended December 31, As of December 31, 2022 2021 2022 2021 Distributor customer A 15 % 18 % 17 % 10 % Distributor customer B * * 15 % 16 % Direct customer A * * * 12 % The Company's customers that are distributors, as opposed to direct customers, represent highly diversified customer bases. Suppliers Suppliers who accounted for 10% or more of the Company's inventory purchases and outstanding balance of accounts payable were: For the Year Ended December 31, As of December 31, 2022 2021 2022 2021 Distributor supplier A 37 % 40 % 11 % 20 % Direct supplier A 14 % 11 % * * Direct supplier B 12 % 10 % * * |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Note 8. Goodwill and Intangible Assets, Net The following is a summary of the changes in the carrying amount of goodwill (in thousands): Balance at December 31, 2022 Balance at December 31, 2021 Gross Accumulated Net Gross Accumulated Net Goodwill $ 16,613 $ 16,613 $ — $ 16,613 $ — $ 16,613 During the three months ended September 30, 2022, the market price of Teknova’s common stock and market capitalization declined significantly. Given the significance of this decline, the Company performed interim goodwill impairment testing. The fair value of the Company was determined using a combination of an income approach and market approach. The income approach was based on the present value of future cash flows, which were derived from financial forecasts, and requires significant assumptions and judgement including, among others, a discount rate and a terminal value. Fair values were based on expected future cash flows using Level 3 inputs under ASC 820, Fair Value Measurement . The cash flows are those expected to be generated by the Company, discounted at the weighted average cost of capital. The present value of future cash flows was determined by discounting estimated future cash flows at an 18.0 % weighted average cost of capital, which considers the risk of achieving the projected cash flows, long-term growth rate, the risk applicable to the Company, industry, and to the market as a whole. The guideline public company method, a market approach method, was also used to estimate the fair value of the Company. The guideline public company method utilizes the trading multiples of similarly traded public companies. The unobservable inputs used to measure the fair value primarily included projected revenue growth rates and the determination of appropriate market comparison companies. Selected multiples were considered and applied to the trailing-twelve-month and next-twelve-month enterprise value-to-revenue multiples. The resulting estimated fair value was reconciled to the Company’s market capitalization. The reconciliation included an estimated implied control premium above the Company's market capitalization on September 30, 2022, of approximately 25 %. Based on the results of the impairment test, the Company determined goodwill was fully impaired and recorded an impairment charge of $ 16.6 million during the three months ended September 30, 2022. There was no impairment of goodwill during the year ended December 31, 2021. The following is a summary of intangible assets with definite and indefinite lives (in thousands): Balance at December 31, 2022 Balance at December 31, 2021 Gross Accumulated Net Gross Accumulated Net Definite Lived: Customer relationships $ 9,180 $ 4,543 $ 4,637 $ 9,180 $ 3,395 $ 5,785 Indefinite Lived: Tradename 12,919 — 12,919 12,919 — 12,919 Total intangible assets $ 22,099 $ 4,543 $ 17,556 $ 22,099 $ 3,395 $ 18,704 For the years ended December 31, 2022 and 2021 amortization expense was approximate ly $ 1.1 m illion and $ 1.1 million, respectively. The remaining weighted-average useful life of definite lived intangible asset s is four y ears . The estimated future amortization expense of intangible assets with definite lives is as follows (in thousands): Amount 2023 $ 1,148 2024 1,148 2025 1,148 2026 1,148 2027 45 Estimated future amortization expense of definite-lived intangible assets $ 4,637 There was no impairment of intangible assets during the years ended December 31, 2022 and 2021. |
Inventories, Net
Inventories, Net | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Note 5. Inventories, Net Inventories consist of the following (in thousands): As of December 31, 2022 2021 Finished goods, net $ 8,368 $ 3,172 Work in process 186 105 Raw materials, net 3,693 2,117 Total inventories, net $ 12,247 $ 5,394 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Note 6. Property, Plant, and Equipment, Net Property, plant, and equipment consist of the following (in thousands): As of December 31, 2022 2021 Machinery and equipment $ 19,433 $ 9,942 Office furniture and equipment 628 649 Vehicles 229 70 Leasehold improvements 12,093 2,805 32,383 13,466 Less—Accumulated depreciation ( 4,520 ) ( 2,473 ) 27,863 10,993 Construction in progress 23,714 18,817 Total property, plant, and equipment, net $ 51,577 $ 29,810 Depreciation expense related to property, plant, and equipment recorded for the years ended December 31, 2022 and 2021 was $ 2.0 million and $ 1.7 million, respectively. Teknova capitalizes a portion of the interest on funds borrowed to finance its capital expenditures. Capitalized interest is recorded as part of an asset’s cost and depreciated over the asset’s useful life. Capitalized interest costs were $ 1.6 million and $ 0.3 million for the years ended December 31, 2022 and 2021, respectively. In December 2022, the Company decided to cease further use and development of certain manufacturing machinery and equipment. The Company reviewed the recoverability of the carrying value of these assets and determined that their carrying value exceeded their fair value. Fair value of these assets was measured employing cost and market approaches, using Level 3 inputs under ASC 820, Fair Value Measurement . Unobservable inputs include salvage value estimates, replacement or reproduction cost estimates as well as consideration of physical deterioration, functional and economic obsolescence, where measurable. As a result of this fair value analysis, an impairment charge of $ 4.2 million was recorded related to these long-lived assets. Carrying value after the impairment charges approximates fair value. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 7. Leases The Company leases office space, warehouse and manufacturing space, and equipment. The Company's lease agreements have remaining lease terms of one year to 15 years , and some of these leases have renewal and termination options. Such termination options are exercisable at the Company’s option. Terms and conditions to extend or terminate such leases are recognized as part of the right-of-use assets and lease liabilities where reasonably certain to be exercised. All of the Company's leases are operating leases. Operating lease expense was $ 3.2 million for the year ended December 31, 2022. Rent expense for the year ended December 31, 2021, was $ 1.7 million. Cash paid for amounts included in the measurement of the lease liabilities was $ 2.8 million for the year ended December 31, 2022. The weighted-average discount rate was 4.9 % and the weighted-average remaining lease term was 9.2 years as of December 31, 2022. Maturities of operating lease liabilities at December 31, 2022, is as follows (in thousands): Amount 2023 $ 3,142 2024 3,046 2025 2,607 2026 2,558 2027 2,529 Thereafter 11,915 Total lease payments 25,797 Less: imputed interest ( 5,463 ) Present value of lease liabilities $ 20,334 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Note 9. Accrued Liabilities Accrued liabilities were comprised of the following (in thousands): As of December 31, 2022 2021 Payroll-related $ 2,796 $ 2,818 Property, plant, and equipment 1,966 1,446 Deferred revenue 198 200 Other 1,243 1,031 Total current accrued liabilities $ 6,203 $ 5,495 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 10. Long-Term Debt, Net On May 10, 2022, the Company entered into the Amended and Restated Credit and Security Agreement (Term Loan) as borrower, with MidCap Financial Trust (MidCap), as agent and lender, and the additional lenders from time to time party thereto (the Term Loan Credit Agreement) and the Amended and Restated Credit and Security Agreement (Revolving Loan) as borrower, with MidCap as agent and lender, and the additional lenders from time to time party thereto (the Revolving Loan Credit Agreement, together with the Term Loan Credit Agreement, the Credit Agreement). The Credit Agreement provided for a $ 57.135 million credit facility (the Credit Facility) consisting of a $ 52.135 million senior secured term loan (the Term Loan) and a $ 5.0 million working capital facility (the Revolver). The Term Loan consisted of the $ 12.0 million balance made available in 2021 under the previous credit facility and an additional $ 40.135 million, staged such that $ 5.135 million was funded upon closing of the Credit Agreement, an additional $ 5.0 million was funded on October 31, 2022, $ 10.0 million was to be available in the first half of 2023, $ 10.0 million was to be available in the second half of 2023 and $ 10.0 million was to be available in the first half of 2024, with the borrowing in the second half of 2023 and in the first half of 2024 being contingent upon achieving trailing twelve months of Clinical Solutions revenue of $ 15.0 million and $ 19.0 million, respectively, and liquidity requirements (as defined in the Credit Agreement) of $ 10.0 million and $ 15.0 million, respectively. The maximum loan amount under the Revolver was $ 5.0 million, and the Company was permitted to request the lenders to increase such amount up to $ 15.0 million. Borrowings on the Revolver were limited in accordance with a borrowing base calculation. The interest on the Term Loan was based on the annual rate of one-month London Inter-Bank Offered Rate (LIBOR) plus 6.45 %, subject to a LIBOR floor of 1.00 %. If any advance under the Term Loan was prepaid at any time, the prepayment fee was based on the amount being prepaid and an applicable percentage amount, such as 3%, 2%, or 1%, based on the date the prepayment is made after the closing date of the Term Loan. Interest on the outstanding balance of the Revolver was payable monthly in arrears at an annual rate of one-month LIBOR plus 3.75 %, subject to a LIBOR floor of 1.00 %. The maturity date of the Credit Facility is May 1, 2027 . On the date of termination of the Term Loan or the date on which the obligations under the Term Loan become due and payable in full, the Company would pay an exit fee in an amount equal to 5.00 % of the total aggregate principal amount of term loans made pursuant to the Term Loan as of such date. The Credit Agreement contained a financial covenant based upon a trailing twelve months of net revenue, including a requirement of $ 42.5 million in the twelve months ending December 31, 2022. On November 8, 2022, the Company entered into Amendment No. 1 to the Credit Agreement (Amendment No. 1 or, as amended, the Amended Credit Agreement) which (i) replaced the LIBOR-based interest rate with a rate equal to the forward-looking one-month term Secured Overnight Financing Rate adjusted upward by 0.10 % (or Term SOFR, as defined in Amendment No. 1) plus an applicable margin ( 6.45 % for the Term Loan and 3.75 % for the Revolver), with a Term SOFR floor of 1.00 %, and with such interest rate calculation change taking effect on December 1, 2022, (ii) increased the applicable prepayment fee percentage amounts by one percentage point, (iii) gave lenders discretion regarding the $ 10.0 million in borrowing that was previously guaranteed to be available under the Term Loan in the first half of 2023, and (iv) reduced the requirements for trailing twelve months of net revenue for all future periods—for example, for the twelve months ending December 31, 2022, the minimum net revenue requirement was reduced from $ 42.5 million to $ 38.0 million, where as of De cember 31, 2022, the Company was in compliance with this requirement . Concurrent with Amendment No. 1, the exit fee due on the date of termination of the Term Loan, or the date on which the obligations under the Term Loan become due and payable in full, increased from 5.00 % to 7.00 % of the total aggregate principal amount of term loans made pursuant to the Term Loan as of such date. Subsequent to December 31, 2022, the Company further amended the Credit Agreement. Refer to Note 17. Subsequent Events, below for a description of the amendment. Previously, on March 26, 2021, the Company entered into the following agreements (together, the Previous Credit Agreement): (i) that certain credit and security agreement (Previous Term Loan), dated as of March 26, 2021, by and among the Company and MidCap Financial Trust, as agent and lender, and the additional lenders from time to time party thereto, and (ii) that certain credit and security agreement (Previous Revolving Loan), dated as of March 26, 2021, by and among the Company and MidCap Financial Trust, as agent and lender, and the additional lenders from time to time party thereto. The Previous Credit Agreement provided for a $ 27.0 million credit facility (the Previous Facility) consisting of a $ 22.0 million senior, secured term loan (the Previous Term Loan), and a $ 5.0 million working capital facility (the Previous Revolver). The Previous Term Loan was staged such that $ 12.0 million was available immediately, an additional $ 5.0 million was available on September 30, 2021, and $ 5.0 million was to be made available in 2022, but the final borrowing in 2022 was contingent upon achieving trailing twelve months net revenue of $ 37.0 million if the proposed funding date was to be on or after January 1, 2022, and before July 1, 2022 or $ 38.5 million if the proposed funding date was to be on or after July 1, 2022, and on or before September 30, 2022, and earnings before interest, taxes, depreciation, and amortization (EBITDA) targets (as defined in the Credit Agreement). The Company opted not to draw down the $5.0 million Previous Term Loan tranche available on September 30, 2021. Borrowings on the Previous Revolver were limited to those derived from a borrowing base calculation; however, as of December 31, 2021, there was no drawdown on the Revolver. The interest on the Previous Term Loan was based on the annual rate of one-month London Inter-Bank Offered Rate (LIBOR) plus 6.45 %, subject to a LIBOR floor of 1.50 %. If any advance under the Previous Term Loan was prepaid at any time, the prepayment fee was based on the amount being prepaid and an applicable percentage amount, such as 3%, 2%, or 1%, based on the date the prepayment was made after the closing date of the Term Loan. The Previous Credit Agreement contained a financial covenant based upon a trailing twelve months of net revenue, including a requirement of $ 32.0 million in the twelve months ended December 31, 2021. As of December 31, 2021, the Company was in compliance with this requirement. The outstanding balance on the Previous Facility would have been due in full on March 1, 2026. At the end of the Previous Term Loan, the Company was to pay an exit fee of $ 0.6 million, which represented 5 % of the $ 12.0 million in borrowings made available immediately on March 26, 2021. Such fee was being accreted to interest expense over the life of the Term Loan. The Company incurred $ 0.3 million of debt issuance costs, which were recorded in long-term debt in the balance sheet. Long-term debt, net consists of the following (in thousands): As of December 31, 2022 2021 Long-term debt $ 22,135 $ 12,000 Cumulative accretion of exit fee 161 90 Unamortized debt discount and debt issuance costs ( 320 ) ( 220 ) Long-term debt, net $ 21,976 $ 11,870 At December 31, 2022, the scheduled maturities of the Company's debt obligations were as follows (in thousands): Amount 2023 $ — 2024 — 2025 6,456 2026 11,068 2027 4,611 Total $ 22,135 As of December 31, 2022, the fair value of Teknova's long-term debt approximates its carrying value. The fair value of Teknova's long-term debt was based on observable market inputs (Level 2). |
Convertible and Redeemable Pref
Convertible and Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Convertible and Redeemable Preferred Stock | Note 11. Convertible and Redeemable Preferred Stock In June 2021, the Company’s board of directors and stockholders, respectively, approved a 1.8746 for-one forward stock split, which was effectuated on June 17, 2021. On June 28, 2021, all outstanding shares of the Company’s Series A preferred stock were converted into 17,512,685 shares of the Company ’ s common stock on a one-to-one basis and their carrying value of $ 35.9 million was reclassified into stockholders’ equity. As of December 31, 2022 and 2021, there were no shares of convertible and redeemable preferred stock issued and outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 12. Stock-Based Compensation Equity Incentive Plans Teknova maintains stock incentive plans for the benefit of certain of Teknova's officers, directors, consultants and employees. The Company granted time-based and performance-based options to purchase common shares under both its 2016 Stock Plan, as amended (2016 Plan) and 2020 Equity Incentive Plan, as amended (2020 Plan). At the time the 2020 Plan became effective, no additional stock awards were granted or are able to be granted in the future under the 2016 Plan. In June 2021, the Company’s board of directors and the Company’s stockholders approved the 2021 Equity Incentive Plan (2021 Plan), which became effective in connection with the IPO. From and after the date on which the 2021 Plan became effective, no further grants were made or will be made under the 2020 Plan . At December 31, 2022, 2,469,164 shares of the Company's common stock remain available for future grants under the 2021 Plan . The types of equity-based awards that may be granted under the 2021 Plan include: incentive stock options or nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other stock-based awards. The equity-based awards for employees will vest over a four-year period, pursuant to two different vesting schedules. For initial equity-based awards granted to employees, the first vest is generally a one-year cliff vest, followed by monthly vesting for the final three years . Thereafter, annual equity-based awards granted to employees typically vest on a monthly basis over the four-year vest term . The initial equity-based awards granted to the Company’s non-employee, independent directors upon appointment to the board of directors will vest over a three-year period and the annual equity-based awards granted to the Company’s non-employee, independent directors granted thereafter will cliff vest after one year from the date of grant. Generally, the number of shares of the Company’s common stock that will be reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year for a period of ten years , beginning on January 1, 2022, and continuing through January 1, 2031, in an amount equal to 4 % of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding year; provided, however, that the Company’s board of directors may act prior to January 1st of a given year to provide that the increase f or such year will be a lesser number of shares of common stock. Effective January 1, 2023, an additional 1,127,176 new shares became available for issuance under the 2021 Plan. The following table summarizes the stock option activity for the year ended December 31, 2022 (in thousands, except share and per share data): Number of Weighted Weighted Average Aggregate Outstanding at January 1, 2022 2,764,112 $ 4.63 8.69 $ 45,280 Granted 1,507,591 $ 11.14 — — Exercised ( 118,900 ) $ 1.22 — — Forfeited ( 232,047 ) $ 9.79 — — Expired ( 74,224 ) $ 2.04 — — Outstanding at December 31, 2022 3,846,532 $ 7.02 8.31 $ 9,083 Exercisable at December 31, 2022 1,354,691 $ 4.80 7.91 $ 4,643 Vested and expected to vest at December 31, 2022 3,561,850 $ 7.55 8.50 $ 7,606 The total intrinsic value of options exercised during the year ended December 31, 2022 was $ 0.9 million. During the year ended December 31, 2021, the total intrinsic value of options exercised was no t significant. The aggregate grant-date fair value of options vested during the year ended December 31, 2022 and 2021, was $ 6.6 million and $ 0.4 million, respectively. The following table summarizes the restricted stock unit activity for the year ended December 31, 2022 (in thousands, except share and per share data): Number of Weighted Weighted Average Aggregate Outstanding at January 1, 2022 — $ — — $ — Granted 28,071 $ 7.43 — — Vested — $ — — — Forfeited — $ — — — Outstanding at December 31, 2022 28,071 $ 7.43 0.42 $ 158 Vested and expected to vest at December 31, 2022 28,071 $ 7.43 0.42 $ 158 Employee Stock Purchase Plan In June 2021, the Company’s board of directors and the Company’s stockholders, respectively, approved the Company’s 2021 Employee Stock Purchase Plan (the ESPP), which became effective in connection with the IPO. At December 31, 2022, 522,442 shares of the Company’s common stock remain available for issuance under the ESPP. The number of shares of the Company’s common stock that will be reserved for issuance will automatically increase on January 1 of each year for a period of ten years , beginning on January 1, 2022, and continuing through January 1, 2031, by the lesser of (i) 1 % of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year; and (ii) 319,911 shares (subject to adjustments for stock splits, dividends, combinations of shares, exchanges of shares, and other “Capitalization Adjustments”, as defined in the ESPP), except before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Effective January 1, 2023, an additional 281,794 new shares became available for issuance under the ESPP. Generally, all regular employees, including executive officers, employed by the Company will be eligible to participate in the ESPP and to contribute, normally through payroll deductions, up to 15 % of their earnings (as defined in the ESPP) for the purchase of the Company’s common stock under the ESPP. Unless otherwise determined by the Company’s board of directors, shares of the Company’s common stock will be purchased for the accounts of employees participating in the Company’s ESPP at a price per share equal to the lesser of (i) 85 % of the fair market value of a share of the Company’s common stock on the first day of an offering; or (ii) 85 % of the fair market value of a share of the Company’s common stock on the date of purchase. Offering periods are generally six months long and begin on May 15 and November 15 of each year. Valuation of Employee Share-Based Awards Teknova uses the Black-Scholes option-pricing model to determine the fair value of stock options. The valuation model for stock compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility and fair value of the Company’s common stock, and an assumed risk-free interest rate. The assumptions used in the Black-Scholes option-pricing model were as follows: Volatility . Since the Company has limited historical data on volatility of its stock, expected volatility is based on the volatility of the stock of similar publicly traded entities. In evaluating similarity, the Company considers factors such as industry, stage of life cycle, size, and financial leverage. Fair value of underlying common stock . The fair value of the Company’s common stock is determined by the closing price of its common stock as reported on the Nasdaq Global Market on the date of grant. Risk-free interest rate . The risk-free rate that the Company uses is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. Expected term . As the Company does not have sufficient historical exercise activity to estimate expected life, the expected life of options granted is determined using the simplified method. The simplified method is based on the vesting period and the contractual term for each grant or for each vesting tranche for awards with graded vesting. The midpoint of the vesting date and the maximum contractual expiration date are used to determine the expected term under this method. Dividend yield . The Company has never declared or paid any cash dividends and do not plan to pay cash dividends in the foreseeable future. Therefore, the Company uses an expected dividend yield of zero. In addition, the terms of the Amended Credit Agreement prohibit us from paying dividends, other than dividends payable in the Company’s common stock, without the prior consent of the lender. The weighted average assumptions used in the Black-Scholes option-pricing model are as follows: For the Year Ended December 31, Employee Stock Option Plans Employee Stock Purchase Plan 2022 2021 2022 2021 Estimated dividend yield - % - % - % - % Weighted-average expected stock price volatility 33.77 % 33.51 % 43.00 % 25.47 % Weighted-average risk-free interest rate 2.79 % 1.06 % 3.70 % 0.06 % Expected average term of options (in years) 6.25 6.17 0.50 0.50 Weighted-average fair value of common stock $ 11.14 $ 19.89 $ 7.20 $ 24.63 Weighted-average fair value per option $ 4.18 $ 6.45 $ 1.96 $ 5.46 Summary of Stock-Based Compensation Expense Stock-based compensation expense included in the accompanying financial statements was as follows (in thousands): For the Year Ended December 31, 2022 2021 Cost of sales $ 147 $ 7 Research and development 187 157 Sales and marketing 504 66 General and administrative 2,873 1,321 Total stock-based compensation expense $ 3,711 $ 1,551 Stock-based compensation expense related to stock options was $ 3.5 million and $ 1.6 million for the years ended December 31, 2022 and 2021, respectively. Unrecognized compensation expense related to stock options was $ 10.1 million at December 31, 2022, which is expected to be recognized as expense over the weighted-average period of 3.11 years. Stock-based compensation expense related to restricted stock units was $ 0.1 million and zero for the years ended December 31, 2022 and 2021, respectively. Unrecognized compensation expense related to restricted stock units was $ 0.1 million at December 31, 2022, which is expected to be recognized as expense over the weighted-average period of 0.42 years. During the year ended December 31, 2021, the Company’s board of directors approved an amendment to the outstanding performance-based option to acquire 231,719 shares of the Company’s common stock previously granted under 2020 Plan, to eliminate the performance-based vesting and provide that such option will vest in 48 equal monthly installments. The stock option modification was measured as the excess of the fair value of the modified option over the fair value of the original option immediately before the modification. The incremental stock-based compensation expense for such stock option modification is approximately $ 3.5 million, of which $ 0.9 million and $ 0.5 million incremental stock-based compensation expense was recognized during the years ended December 31, 2022 and 2021, respectively, in general and administrative expense in the statements of operations and comprehensive loss. Additionally, in January 2019, the Company granted 284,682 performance-based options that vest upon a change of control. As of December 31, 2022, these options were not considered probable of vesting. The Company had unrecognized compensation expense of approximately $ 0.5 m illion at December 31, 2022, relating to these options. Total stock-based compensation expense related to the ESPP was not significant for the years ended December 31, 2022 and 2021, respectively. Total compensation cost related to the ESPP not yet recognized is also not significant. As of December 31, 2022, an insignificant amount has been withheld on behalf of employees for a future purchase under the ESPP. The Company issued 48,506 and zero shares of common stock under the ESPP during the years ended December 31, 2022 and 2021, respectively. |
Net Income (Loss) Per Share Att
Net Income (Loss) Per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share Attributable to Common Stockholders | Note 14. Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. For purposes of this calculation, stock options, restricted stock units, employee stock purchase rights, and convertible preferred stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share as their effect is anti-dilutive for all periods presented. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data): For the Year Ended December 31, 2022 2021 Net loss $ ( 47,468 ) $ ( 9,803 ) Weighted average shares used in computing net loss per share—basic and diluted 28,083,563 16,087,653 Net loss per share—basic and diluted $ ( 1.69 ) $ ( 0.61 ) The following is a summary of the common stock equivalents for the securities outstanding during the respective periods that have been excluded from the computation of diluted net loss per common share, as their effect would be anti-dilutive: For the Year Ended December 31, 2022 2021 Employee share-based awards to purchase common stock 3,208,403 2,206,993 Convertible Series A preferred stock — 4,607,059 Total 3,208,403 6,814,052 |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 15. Related Parties The Company has identified the following as related parties through common control: Meeches LLC and Thomas E. Davis, LLC. Meeches LLC is controlled by Ted Davis and Irene Davis, founders and current directors, and greater than five percent stockholders of the Company. Thomas E. Davis, LLC is also controlled by Ted Davis. The Company leased certain real property and had a related party note receivable totaling $ 0.5 million, which was received on March 31, 2021, from Thomas E. Davis, LLC. The Company leases certain real property from Meeches LLC and does not have any outstanding balances owed to Meeches LLC as of December 31, 2022 and 2021, respectively. For the years ended December 31, 2022 and 2021, the Company paid Meeches LLC $ 0.3 million and $ 0.3 million, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13. Income Taxes Teknova’s provision for (benefit from) income taxes consist of the following for the year ended December 31, 2022 and 2021 (in thousands): For the Year Ended December 31, 2022 2021 Current: Federal $ — $ — State 7 3 Total current 7 3 Deferred: Federal ( 2,055 ) ( 2,604 ) State 125 ( 233 ) Total deferred ( 1,930 ) ( 2,837 ) Income tax benefit $ ( 1,923 ) $ ( 2,834 ) A reconciliation of the statutory tax rate to the Company’s effective tax rate is as follows: For the Year Ended December 31, 2022 2021 Statutory federal income tax rate % 21.0 % 21.0 % State income tax rate 5.6 2.1 Stock compensation ( 0.5 ) ( 1.5 ) Research and development credit 0.2 0.6 Change in valuation allowance ( 13.6 ) — Goodwill impairment ( 9.0 ) — Other 0.2 0.2 Effective tax rate % 3.9 % 22.4 % Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due, plus deferred taxes. Deferred taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either deductible or taxable when the assets and liabilities are recovered or settled. The Company’s component of net deferred tax liability and assets consist of the following as of December 31, 2022 and 2021 (in thousands): As of December 31, 2022 2021 Deferred tax asset Net operating loss carryforwards $ 8,005 $ 3,672 Accrued compensation 552 401 Stock compensation 1,008 262 Tax credit carryforwards 275 150 Accruals and other 321 241 Operating lease liabilities 5,435 — Capitalized research and development expenses 1,450 — Total deferred tax asset 17,046 4,726 Deferred tax liability Fixed assets ( 1,131 ) ( 2,429 ) Intangibles ( 4,693 ) ( 4,973 ) Operating right-of-use lease assets ( 5,275 ) — Total deferred tax liability ( 11,099 ) ( 7,402 ) Valuation allowance ( 7,170 ) ( 477 ) Net deferred tax liability $ ( 1,223 ) $ ( 3,153 ) As of the end of December 31, 2022, Teknova has federal and state net operating loss carryforwards (NOLs) of $ 28.9 million and $ 30.3 million, respectively. The federal NOLs will carryforward indefinitely but are subject to an 80 % taxable income limitation. The state NOLs begin to expire in 2036 . As of December 31, 2022, the Company has federal research and development tax credit car ryforwards of $ 0.2 million, which will begin to expire in 2035 a nd a state research and development tax credit carryforward of $ 0.1 million and carry forward indefinitely. NOLs and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. This could limit the amount of NOLs and tax credits that the Company can utilize annually to offset future taxable income or tax liabilities. On June 29, 2020, the California legislature enacted California Assembly Bill 85 (AB 85), which suspends the use of California NOLs and limits the use of California research tax credits for tax years beginning in 2020 and before 2023. There was no significant impact on the Company's 2021 financial statements due to the loss generated. Subsequently on February 9, 2022, California Senate Bill (SB 113) was enacted and restores the use of net operating losses and business tax credits that were suspended or limited under AB 85 one year earlier, allowing tax attributes to be used in fiscal year 2022. There was no significant impact on the Company's 2022 financial statements due to the loss generated. Effective for tax years beginning after December 31, 2021, taxpayers are required to capitalize any expenses incurred that are considered incidental to research and experimentation (R&E) activities under IRC Section 174. While taxpayers historically had the option of deducting these expenses under IRC Section 174, the Tax Cuts and Jobs Act mandates capitalization and amortization beginning with tax years after December 31, 2021. Expenses incurred in connection with R&E activities must be amortized over a 5-year period if incurred in the U.S. or over a 15-year period if incurred outside of the U.S. R&E activities are broader in scope than the calculation of qualified research activities under IRC Section 41 (for research and development tax credit purposes). For the year ended December 31, 2022, the Company performed an analysis based on all the guidance available and has determined that it will continue to be in a loss position after considering the R&E capitalization. The Company will continue to monitor the effects of this legislation, but we do not expect this change will have a material cash impact to the Company’s taxes because our remaining operating expenses after excluding R&E expenses are significant enough to keep the Company in a current-year loss. The Company had insignificant unrecognized tax benefits at December 31, 2022 and 2021. In connection with FASB’s Accounting for Uncertainty in Income Taxes, the Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not expect to recognize any unrecognized tax benefits over the next twelve months. Consequently, the Company has no t accrued interest or penalties related to uncertain tax positions as of the end of December 31, 2022 or 2021. Teknova files income tax returns in the U.S. federal jurisdiction and various states. The Company is no longer subject to U.S. federal income tax examinations for tax years prior to 2019. The Company is no longer subject to state income tax examinations for tax years prior to 2018. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities. |
Other Financial Information
Other Financial Information | 12 Months Ended |
Dec. 31, 2022 | |
Other Financial Information Abstract | |
Other Financial Information | Note 16. Other Financial Information The change in the allowance for doubtful accounts is as follows: For the Year Ended December 31, 2022 2021 Beginning balance $ 23 $ 23 Provisions (benefits) 25 235 Recoveries (write-offs), net ( 26 ) ( 235 ) Ending balance $ 22 $ 23 The change in the inventory reserve is as follows: For the Year Ended December 31, 2022 2021 Beginning balance $ 470 $ 29 Provisions (benefits) 697 555 Write-offs and other ( 121 ) ( 114 ) Ending balance $ 1,046 $ 470 The change in the income tax valuation allowance is as follows: For the Year Ended December 31, 2022 2021 Beginning balance $ 477 $ — Additions charged to expense 6,693 477 Reductions charged to other accounts — — Ending balance $ 7,170 $ 477 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17. Subsequent Events On February 1, 2023, the Company carried out a reduction in workforce of approximately 40 positions, aimed at reducing operating expenses. The Company estimates that it will incur approximately $ 0.8 million of costs in connection with the reduction in workforce related to severance pay and other termination benefits. The Company expects the majority of the costs to be incurred and payments made during the first quarter of 2023. Total annual cost savings are estimated at $ 4 million. On March 28, 2023, the Company entered into Amendment No. 2 to the Credit Agreement (Amendment No. 2) which (i) increased the applicable margin from 6.45 % to 7.00 % for the Amended Term Loan and from 3.75 % to 4.00 % for the Amended Revolver, and increased the Term SOFR floor from 1.00 % to 4.50 % on both the Amended Term Loan and Amended Revolver, (ii) gave lenders discretion regarding the $ 10.0 million in borrowings in the second half of 2023 and the $ 10.0 million in borrowings in the first half of 2024 by removing the trailing twelve month Clinical Solutions revenue requirement that was previously required under the Amended Term Loan, (iii) removed the increase in the minimum cash covenant from $ 10.0 million to $ 15.0 million on the $ 10.0 million in borrowings in the first half of 2024, and added the $ 10.0 million minimum cash covenant requirement throughout the remaining term of the Amended Credit Agreement, and (iv) reduced the requirements for trailing twelve months of net revenue for all future periods—for example, for the twelve months ending December 31, 2023, the minimum net revenue requirement was reduced from $ 45.0 million to $ 42.0 million. Concurrent with Amendment No. 2, the exit fee due on the date of termination of the Amended Term Loan, or the date on which the obligations under the Amended Term Loan become due and payable in full, increased from 7.00 % percent to 8.50 % of the total aggregate principal amount of term loans made pursuant to the Term Loan (including amendments thereto) as of such date. Other than the modifications described in this paragraph and in Item 9B below, the Amended Credit Agreement continues unmodified in all other material respects. On March 30, 2023 , the Company entered into a Sales Agreement (the Sales Agreement) with Cowen and Company, LLC (Cowen), under which the Company may offer and sell, from time to time, shares of common stock having aggregate gross proceeds of up to $ 50.0 million (the ATM Shares). The Company will pay Cowen a commission of up to 3 % of the gross proceeds of any sales of the ATM Shares pursuant to the Sales Agreement. |
Summary of Accounting Policies
Summary of Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The accompanying financial statements and related notes are prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain amounts of assets and liabilities, and disclosures of assets and liabilities, at the date of each financial statement, and the reported amount of revenues and expenses during the reporting period. Significant items that are subject to such estimates and assumptions include, but are not limited to, the valuation of share-based payment awards, impairment of long-lived assets, impairment of goodwill and intangible assets, and income taxes. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or cond itions. |
Going Concern | Going Concern These financial statements and accompanying notes have been prepared in accordance with the provisions of Accounting Standards Codification (ASC) 205-40, Presentation of Financial Statements—Going Concern , on the basis that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has incurred operating losses in the past and expects to incur operating losses in the near to medium-term. We have incurred net losses of $ 47.5 million and $ 9.8 million in the years ended December 31, 2022 and 2021, respectively, and have an accumulated deficit of $ 55.0 million as of December 31, 2022. As of December 31, 2022, we had $ 50.3 million in working capital, which included $ 42.2 million in cash and cash equivalents. In addition to our existing cash and cash equivalents balance, another source of liquidity is our credit facility as described below Note 10. Long-term Debt, Net. We believe that our existing cash and cash equivalents as of December 31, 2022, together with our credit facility under the Amended Credit Agreement, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. Our principal liquidity requirements are to fund our operations and capital expenditures. We may, however, require or elect to secure additional financing as we continue to execute our business strategy. If we require or elect to raise additional funds, we may do so through equity or debt financing, which may or may not be available on favorable terms and could require us to agree to covenants that limit our operating flexibility. |
Segment Reporting | Segment Reporting Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance. Teknova’s CODM is its Chief Executive Officer, currently Stephen Gunstream. Teknova has determined that it operates in one reporting unit, one operating segment, and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. |
Concentrations of Credit Risk | Concentrations of Credit Risk Teknova’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash with high-quality banking institutions. At times, the Company’s cash balances may exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit. Teknova's cash equivalents consist primarily of money market funds invested in U.S. Treasuries. Teknova extends credit to customers based on its evaluation of the customer's financial condition and routinely communicates with its customers regarding payments. The Company has a history of limited write-offs, and therefore believes that its accounts receivable credit risk exposure is low. For information regarding the Company’s significant customers and suppliers, see Note 4. |
Cash and Cash Equivalents | Cash and Cash Equivalents Teknova’s cash and cash equivalents include cash on hand, cash held in banks, and highly-liquid investments with maturities of three months or less at the date of acquisition. Teknova maintains its cash in bank deposit accounts in financial institutions that are insured by the FDIC up to a balance of $ 250.0 thousand. Cash equivalents are stated at amortized cost, plus accrued interest, which approximates fair value. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of certain of Teknova’s financial instruments, including cash equivalents, accounts receivable, inventories, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at invoice value, less estimated allowances for doubtful accounts. Teknova uses the allowance method to account for uncollectible accounts receivable, calculated by management using the historical average of uncollectible accounts. The Company continually monitors its customer payments and maintains an allowance for estimated losses resulting from its customers’ inability to make required payments. Accounts receivable are considered past due once customer payment terms have been exceeded. Receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. |
Inventories | Inventories Inventory, consisting of raw materials, work in process and finished goods, is stated at the lower of cost or net realizable value, on a first-in, first-out basis. Teknova writes down its inventory for estimated obsolescence or inventory in excess of reasonably expected near-term sales or unmarketable inventory, in an amount equal to the difference between the cost of inventory and the estimated net realizable value, based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by Teknova, additional inventory write-downs may be required. Inventory impairment charges establish a new cost basis for inventory, and charges are not reversed subsequently to income, even if circumstances later suggest that increased carrying amounts are recoverable. |
Capitalized Software Implementation Costs | Capitalized Software Implementation Costs Teknova capitalizes certain implementation costs incurred under a cloud computing hosting arrangement. Costs incurred during the application development stage related to the implementation of the hosting arrangement are capitalized and included within other assets on the accompanying balance sheets. Amortization of capitalized implementation costs is recognized on a straight-line basis over the expected term of the associated hosting arrangement when it is ready for its intended use. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. As of December 31, 2022 and 2021, Teknova had capitalized software implementation costs of $ 2.2 million and $ 0.1 million, respectively. Amortization expense related to capitalized implementation costs for the year ended December 31, 2022 was $ 0.1 million. No amortization expense related to capitalized implementation costs was recorded for the year ended December 31, 2021 as the underlying implementation activities were not complete. |
Property, Plant and Equipment | Property, Plant, and Equipment Teknova records property, plant, and equipment at fair value when it is acquired in a business combination or at cost for all other purchases of property, plant, and equipment. Property, plant, and equipment is depreciated over the estimated useful lives of the assets, using the straight-line method. Any leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the estimated remaining life of the lease. Costs for repairs and maintenance that do not significantly increase the value or estimated lives of property, plant, and equipment are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheets, and the resulting gain or loss is reflected in the statements of operations and comprehensive loss. The estimated useful lives of the major classes of property and equipment are as follows: Estimated Useful Lives Machinery and equipment 5 – 15 years Office furniture and equipment 3 – 7 years Vehicles 5 years Leasehold improvements 3 – 15 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Teknova evaluates its long-lived assets for impairment when events or changes in circumstances indicate a possible inability to recover carrying amounts. Recoverability is assessed by comparing the carrying value of the assets to estimated undiscounted future cash flows expected to be generated by the assets. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated during the life of those assets are less than the assets’ carrying amounts. If an asset is impaired, the loss is measured as the amount by which the asset’s carrying value exceeds its fair value. For the fiscal year ended December 31, 2022, the Company recorded impairments of its long-lived assets, see Note 6. Property, Plant, and Equipment, Net. There were no indicators of impairment during the year ended December 31, 2021. |
Goodwill | Goodwill Goodwill is the excess of the Company’s fair value over the Company’s fair value accounting basis of the Company’s net assets and liabilities. Goodwill is not amortized, but is tested for impairment annually as of October 1, or more frequently if events or circumstances indicate that the carrying value may no longer be recoverable and that an impairment may have occurred. Teknova first considers qualitative factors that indicate whether impairment may have occurred. Such indicators may include, macro-economic conditions, such as adverse industry or market conditions and entity-specific events, such as increasing costs, declining financial performance, or loss of key personnel. If the Company’s assessment of such qualitative factors indicates that a reduction in the carrying value is more likely than not to have occurred, Teknova performs a quantitative assessment, comparing the fair value of the Company (in this capacity, the Reporting Unit) to the carrying value, including goodwill, of the Reporting Unit. If the carrying value of the Reporting Unit exceeds its fair value, an impairment has occurred, and an impairment charge is recognized for the difference up to the carrying value of the Reporting Unit’s goodwill. The fair value of the Reporting Unit is a Level 3 measure and is determined using a market and income approach. For the fiscal year ended December 31, 2022, the Company fully impaired its goodwill, see Note 8. Goodwill and Intangible Assets, Net. There was no impairment of goodwill during the year ended December 31, 2021. |
Intangible Assets | Intangible Assets Teknova’s intangible assets consist of the Teknova trade name and the Company's customer relationships. Indefinite-lived intangible assets are not amortized but are tested for impairment at least annually as of October 1, or more frequently if events or circumstances indicate that it is more likely than not that an asset is impaired. If the fair value of the asset is less than its carrying amount, an impairment charge would be recognized in an amount equal to the difference between the carrying amount and the fair value. Finite-lived intangible assets are amortized over the estimated economic useful lives of the assets, which is the period during which expected cash flows support the fair value of such intangible assets. Teknova reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or an asset group may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related assets’ or asset group’s carrying value. There was no impairment of intangible assets during the years ended December 31, 2022 and 2021. |
Leases | Leases The Company determines if an arrangement is an operating lease at a lease's inception. Leases with an initial term of 12 months or fewer are not recorded on the balance sheet. All other operating leases are recorded on the balance sheet with a corresponding operating lease asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants. Operating lease assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when such options are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate, adjusted for the lease term, based on the information available at the lease commencement or modification date as required. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs represent legal, consulting, and other financial costs associated with debt financing and are presented on the balance sheets as a direct reduction from the carrying amount of the related debt instrument. Debt issuance costs on the term debt are amortized to interest expense over the term of the applicable debt agreement using the effective interest rate method. |
Revenue Recognition | Revenue Recognition We account for revenue in accordance with ASC 606, Revenue From Contracts With Customers . Teknova recognizes revenue for sales of goods through the following steps: ▪ Identification of the contract, or contracts, with a customer, typically a purchase order ▪ Identification of the performance obligations in the contract ▪ Determination of the transaction price ▪ Allocation of the transaction price to the performance obligations in the contract ▪ Recognition of revenue when, or as, the company satisfies a performance obligation Teknova recognizes revenue from the sale of manufactured products and services when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when control is transferred to the customer. Teknova’s sales are made directly to customers or through distributors, generally under agreements with payment terms typically shorter than 90 days and, in no case exceeding one year. Therefore, Teknova’s contracts do not contain a significant financing component. Sales, value add, and other taxes collected concurrent with revenue are excluded from sales. The Company records amounts billed to customers for shipping and handling in a sales transaction as revenue. Shipping and handling costs are included in general and administrative expenses as revenue is recognized. Shipping and handling costs for the years ended December 31, 2022 and 2021 were $ 1.4 million and $ 1.1 million, respectively. Occasionally, Teknova offers rebates, discounts, and returns on its products, however returns and refunds occur rarely. The Company records rebates, discounts, and returns at the time they occur. The difference between recording these as they occur and estimating the amount of consideration in exchange for the transfer of promised goods would not have a material impact on the financial statements. Costs incurred to obtain contracts with customers are expensed immediately, because the amortization period for such costs is one year or less. |
Cost of Sales | Cost of Sales Cost of sales includes salaries, wages and benefits, raw materials consumption (including direct and indirect material), depreciation, utilities, rent, manufacturing supplies, and other production overhead. |
Research and Development Expenses | Research and Development Expenses The Company’s research and development expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for personnel in process engineering and product development functions, expenses related to occupancy costs, laboratory supplies, consulting fees, and depreciation associated with various assets used in the research and development of the Company’s products and processes. |
Sales and Marketing Expenses | Sales and Marketing Expenses The Company’s sales and marketing expenses primarily consist of employee-related expenses, including salaries, benefits, and stock-based compensation expense for sales and marketing employees, expenses related to occupancy costs, brand strategy, website, content and collateral. The Company expenses advertising costs as incurred. Advertising expense for the years ended December 31, 2022 and 2021 were no t significant and $ 0.4 million, respectively, and are included in s ales and marketing expenses. |
General and Administrative Expenses | General and Administrative Expenses The Company’s general and administrative expenses primarily consist of costs associated with executive and administrative staff, and other expenses such as shipping charges, professional service fees, occupancy costs, IT systems, insurance, depreciation, and stock-based compensation expense for executive and administrative staff. |
Stock-Based Compensation | Stock-Based Compensation Teknova measures and recognizes compensation expense for all stock-based awards, including stock options, restricted stock units, and stock purchase rights granted under the Employee Stock Purchase Plan (ESPP) to employees, based on the estimated fair value of the awards on the date of grant. The fair value of each stock option granted and employee stock purchase rights are estimated using the Black-Scholes option-pricing model, which requires the Company to make a number of assumptions, including expected volatility, the expected risk-free interest rate, the expected term, and the expected dividend. The fair value of each restricted stock unit is based on the fair value of the Company’s common stock on the date of grant. Stock-based compensation expense is recognized over the requisite service period of the award, which generally represents the scheduled vesting period. Forfeitures are recognized as they occur. |
Employee Benefit Plans | Employee Benefit Plans Teknova has a salary deferral 401(k) plan (the 401(k) Plan) covering substantially all employees. Contrib utions by the Company to the 401(k) Plan for the years ended December 31, 2022 and 2021 were $ 0.6 million and $ 0.6 million, respectively. Contributions payable as of December 31, 2022 and 2021, of $ 0.1 million and $ 0.3 million, respectively, are included within accrued liabilities in the accompanying financial statemen ts. |
Income Taxes | Income Taxes Teknova uses the asset and liability method in accounting for its deferred income taxes. Under this method, deferred income taxes are provided for differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes, using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates on the date of enactment. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be realized. Teknova accounts for unrecognized tax benefits based upon its assessment of whether tax benefits are more likely than not to be sustained upon examination by tax authorities. The Company reports a liability for unrecognized tax benefits taken, or expected to be taken, in a tax return and recognizes associated interest and penalties, if any, in income tax expense. Unrecognized tax benefits as of December 31, 2022 and 2021, were not significant. |
Net Loss Per Share of Common Stock | Net Loss Per Share of Common Stock Basic net income (loss) per share is computed using the two-class method. Diluted net income (loss) per share is computed using the more dilutive of (i) the treasury stock method or if-converted method, or (ii) the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The treasury stock method uses the number of new shares that may be created by unexercised in-the-money options, where the exercise price is less than the current share price. The if-converted method calculates the value of convertible securities as if they were converted into new shares. Per share amounts are computed by dividing net income (loss) by the weighted average shares outstanding during each period. The diluted net income (loss) per share is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2022, the Company adopted ASU No. 2016-02, Leases (Topic 842) using the modified retrospective approach, applied at the beginning of the period of adoption, and elected the package of transitional practical expedients. The adoption of this standard resulted in recording operating right-of-use lease assets of $ 20.3 million, which included reclassifying approximately $ 0.2 million of deferred rent as a component of the operating lease asset as of January 1, 2022. The adoption also resulted in recording operating lease liabilities of $ 20.5 million as of January 1, 2022. The standard did not have an impact on the statements of operations and cash flows. Refer to Note 7. Leases herein for additional information pertaining to the adoption of the new standard. Effective January 1, 2022, the Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removed certain exceptions to the general principles in ASC 740 and clarified and amended certain guidance to promote consistent application. The adoption of this standard did not have a significant impact on the Company's financial statements. Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326). The standard introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses and will apply to accounts receivable. The new guidance will be effective for Teknova’s annual and interim periods beginning after December 15, 2022. Teknova is currently evaluating the impact of the adoption of the standard on the financial statements and does not anticipate the standard to have a significant impact. |
Summary of Accounting Policie_2
Summary of Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Lives of Major Classes of Property and Equipment | The estimated useful lives of the major classes of property and equipment are as follows: Estimated Useful Lives Machinery and equipment 5 – 15 years Office furniture and equipment 3 – 7 years Vehicles 5 years Leasehold improvements 3 – 15 years |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Teknova’s revenue, disaggregated by product category, for the years e nded December 31, 2022 and 2021 was follows (in thousands): For the Year Ended December 31, 2022 2021 Lab Essentials $ 31,772 $ 27,184 Clinical Solutions 8,445 6,793 Sample Transport 6 1,530 Other 1,197 1,386 Total revenue $ 41,420 $ 36,893 Teknova’s revenue, disaggregated by geographic region, for the years ended December 31, 2022 and 2021 was follows (in thousands): For the Year Ended December 31, 2022 2021 United States $ 40,103 $ 35,808 International 1,317 1,085 Total revenue $ 41,420 $ 36,893 |
Concentrations of Risk (Tables)
Concentrations of Risk (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value, Concentration of Risk, Financial Assets, Balance Sheet Groupings [Abstract] | |
Summary Of Company Revenues And Outstanding Balance Of Accounts Receivable Table Text Block | Customers who accounted for 10% or more of the Company's revenues and outstanding balance of accounts receivable were: For the Year Ended December 31, As of December 31, 2022 2021 2022 2021 Distributor customer A 15 % 18 % 17 % 10 % Distributor customer B * * 15 % 16 % Direct customer A * * * 12 % |
Summary Of Company Inventory Purchases And Outstanding Balance Of Accounts Payable | Suppliers who accounted for 10% or more of the Company's inventory purchases and outstanding balance of accounts payable were: For the Year Ended December 31, As of December 31, 2022 2021 2022 2021 Distributor supplier A 37 % 40 % 11 % 20 % Direct supplier A 14 % 11 % * * Direct supplier B 12 % 10 % * * |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of the changes in the carrying amount of goodwill | The following is a summary of the changes in the carrying amount of goodwill (in thousands): Balance at December 31, 2022 Balance at December 31, 2021 Gross Accumulated Net Gross Accumulated Net Goodwill $ 16,613 $ 16,613 $ — $ 16,613 $ — $ 16,613 |
Summary of Intangible Assets with Definite and Indefinite Lives | The following is a summary of intangible assets with definite and indefinite lives (in thousands): Balance at December 31, 2022 Balance at December 31, 2021 Gross Accumulated Net Gross Accumulated Net Definite Lived: Customer relationships $ 9,180 $ 4,543 $ 4,637 $ 9,180 $ 3,395 $ 5,785 Indefinite Lived: Tradename 12,919 — 12,919 12,919 — 12,919 Total intangible assets $ 22,099 $ 4,543 $ 17,556 $ 22,099 $ 3,395 $ 18,704 |
Schedule of Future Amortization Expense | The estimated future amortization expense of intangible assets with definite lives is as follows (in thousands): Amount 2023 $ 1,148 2024 1,148 2025 1,148 2026 1,148 2027 45 Estimated future amortization expense of definite-lived intangible assets $ 4,637 There was no impairment of intangible assets during the years ended December 31, 2022 and 2021. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following (in thousands): As of December 31, 2022 2021 Finished goods, net $ 8,368 $ 3,172 Work in process 186 105 Raw materials, net 3,693 2,117 Total inventories, net $ 12,247 $ 5,394 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant, and equipment consist of the following (in thousands): As of December 31, 2022 2021 Machinery and equipment $ 19,433 $ 9,942 Office furniture and equipment 628 649 Vehicles 229 70 Leasehold improvements 12,093 2,805 32,383 13,466 Less—Accumulated depreciation ( 4,520 ) ( 2,473 ) 27,863 10,993 Construction in progress 23,714 18,817 Total property, plant, and equipment, net $ 51,577 $ 29,810 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule Of Maturities Of Operating Lease Liabilities | Maturities of operating lease liabilities at December 31, 2022, is as follows (in thousands): Amount 2023 $ 3,142 2024 3,046 2025 2,607 2026 2,558 2027 2,529 Thereafter 11,915 Total lease payments 25,797 Less: imputed interest ( 5,463 ) Present value of lease liabilities $ 20,334 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Summary of Accrued Liabilities | Accrued liabilities were comprised of the following (in thousands): As of December 31, 2022 2021 Payroll-related $ 2,796 $ 2,818 Property, plant, and equipment 1,966 1,446 Deferred revenue 198 200 Other 1,243 1,031 Total current accrued liabilities $ 6,203 $ 5,495 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Components of Carrying Value of Long-Term Debt | Long-term debt, net consists of the following (in thousands): As of December 31, 2022 2021 Long-term debt $ 22,135 $ 12,000 Cumulative accretion of exit fee 161 90 Unamortized debt discount and debt issuance costs ( 320 ) ( 220 ) Long-term debt, net $ 21,976 $ 11,870 |
Schedule of Maturities of Term Loan | At December 31, 2022, the scheduled maturities of the Company's debt obligations were as follows (in thousands): Amount 2023 $ — 2024 — 2025 6,456 2026 11,068 2027 4,611 Total $ 22,135 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Stock Options Activity | The following table summarizes the stock option activity for the year ended December 31, 2022 (in thousands, except share and per share data): Number of Weighted Weighted Average Aggregate Outstanding at January 1, 2022 2,764,112 $ 4.63 8.69 $ 45,280 Granted 1,507,591 $ 11.14 — — Exercised ( 118,900 ) $ 1.22 — — Forfeited ( 232,047 ) $ 9.79 — — Expired ( 74,224 ) $ 2.04 — — Outstanding at December 31, 2022 3,846,532 $ 7.02 8.31 $ 9,083 Exercisable at December 31, 2022 1,354,691 $ 4.80 7.91 $ 4,643 Vested and expected to vest at December 31, 2022 3,561,850 $ 7.55 8.50 $ 7,606 |
Schedule of Unvested Restricted Stock Units Roll Forward [Table Text Block] | The following table summarizes the restricted stock unit activity for the year ended December 31, 2022 (in thousands, except share and per share data): Number of Weighted Weighted Average Aggregate Outstanding at January 1, 2022 — $ — — $ — Granted 28,071 $ 7.43 — — Vested — $ — — — Forfeited — $ — — — Outstanding at December 31, 2022 28,071 $ 7.43 0.42 $ 158 Vested and expected to vest at December 31, 2022 28,071 $ 7.43 0.42 $ 158 |
Schedule of Stock-Based Compensation Expense | Summary of Stock-Based Compensation Expense Stock-based compensation expense included in the accompanying financial statements was as follows (in thousands): For the Year Ended December 31, 2022 2021 Cost of sales $ 147 $ 7 Research and development 187 157 Sales and marketing 504 66 General and administrative 2,873 1,321 Total stock-based compensation expense $ 3,711 $ 1,551 |
Schedule of Weighted-Average Assumptions used in Black-Scholes Option-Pricing Model | The weighted average assumptions used in the Black-Scholes option-pricing model are as follows: For the Year Ended December 31, Employee Stock Option Plans Employee Stock Purchase Plan 2022 2021 2022 2021 Estimated dividend yield - % - % - % - % Weighted-average expected stock price volatility 33.77 % 33.51 % 43.00 % 25.47 % Weighted-average risk-free interest rate 2.79 % 1.06 % 3.70 % 0.06 % Expected average term of options (in years) 6.25 6.17 0.50 0.50 Weighted-average fair value of common stock $ 11.14 $ 19.89 $ 7.20 $ 24.63 Weighted-average fair value per option $ 4.18 $ 6.45 $ 1.96 $ 5.46 |
Net Income (Loss) Per Share A_2
Net Income (Loss) Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic And Diluted Net (Loss) Income Per Share Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data): For the Year Ended December 31, 2022 2021 Net loss $ ( 47,468 ) $ ( 9,803 ) Weighted average shares used in computing net loss per share—basic and diluted 28,083,563 16,087,653 Net loss per share—basic and diluted $ ( 1.69 ) $ ( 0.61 ) |
Summary of Common Stock Equivalents Excluded from Calculation of Diluted Loss per Share Attributable to Common Stockholders | The following is a summary of the common stock equivalents for the securities outstanding during the respective periods that have been excluded from the computation of diluted net loss per common share, as their effect would be anti-dilutive: For the Year Ended December 31, 2022 2021 Employee share-based awards to purchase common stock 3,208,403 2,206,993 Convertible Series A preferred stock — 4,607,059 Total 3,208,403 6,814,052 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Tax Expense (Benefit) | Teknova’s provision for (benefit from) income taxes consist of the following for the year ended December 31, 2022 and 2021 (in thousands): For the Year Ended December 31, 2022 2021 Current: Federal $ — $ — State 7 3 Total current 7 3 Deferred: Federal ( 2,055 ) ( 2,604 ) State 125 ( 233 ) Total deferred ( 1,930 ) ( 2,837 ) Income tax benefit $ ( 1,923 ) $ ( 2,834 ) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory tax rate to the Company’s effective tax rate is as follows: For the Year Ended December 31, 2022 2021 Statutory federal income tax rate % 21.0 % 21.0 % State income tax rate 5.6 2.1 Stock compensation ( 0.5 ) ( 1.5 ) Research and development credit 0.2 0.6 Change in valuation allowance ( 13.6 ) — Goodwill impairment ( 9.0 ) — Other 0.2 0.2 Effective tax rate % 3.9 % 22.4 % |
Schedule of Net Deferred Tax Liability and Assets | The Company’s component of net deferred tax liability and assets consist of the following as of December 31, 2022 and 2021 (in thousands): As of December 31, 2022 2021 Deferred tax asset Net operating loss carryforwards $ 8,005 $ 3,672 Accrued compensation 552 401 Stock compensation 1,008 262 Tax credit carryforwards 275 150 Accruals and other 321 241 Operating lease liabilities 5,435 — Capitalized research and development expenses 1,450 — Total deferred tax asset 17,046 4,726 Deferred tax liability Fixed assets ( 1,131 ) ( 2,429 ) Intangibles ( 4,693 ) ( 4,973 ) Operating right-of-use lease assets ( 5,275 ) — Total deferred tax liability ( 11,099 ) ( 7,402 ) Valuation allowance ( 7,170 ) ( 477 ) Net deferred tax liability $ ( 1,223 ) $ ( 3,153 ) |
Other Financial Information (Ta
Other Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Statement [Abstract] | |
Schedule of change in the allowance for doubtful accounts | The change in the allowance for doubtful accounts is as follows: For the Year Ended December 31, 2022 2021 Beginning balance $ 23 $ 23 Provisions (benefits) 25 235 Recoveries (write-offs), net ( 26 ) ( 235 ) Ending balance $ 22 $ 23 |
Schedule of change in the inventory reserve | The change in the inventory reserve is as follows: For the Year Ended December 31, 2022 2021 Beginning balance $ 470 $ 29 Provisions (benefits) 697 555 Write-offs and other ( 121 ) ( 114 ) Ending balance $ 1,046 $ 470 |
Schedule of change in the income tax valuation allowance | The change in the income tax valuation allowance is as follows: For the Year Ended December 31, 2022 2021 Beginning balance $ 477 $ — Additions charged to expense 6,693 477 Reductions charged to other accounts — — Ending balance $ 7,170 $ 477 |
Nature of the Business - Additi
Nature of the Business - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 28, 2021 | Jun. 29, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsidiary Sale Of Stock [Line Items] | ||||
Common stock, shares issued | 28,179,423 | 28,012,017 | ||
Payment of issuance costs for initial public offering | $ 99,100 | $ 0 | $ 102,672 | |
Underwriting discounts and commissions | 7,700 | |||
Issuance of common stock upon initial public offering, net of issuance costs and underwriting discounts (in shares) | 17,512,685 | |||
Preferred stock, shares outstanding | 0 | 0 | ||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $ 3,600 | $ 3,600 | ||
Convertible and Redeemable Preferred Stock [Member] | ||||
Subsidiary Sale Of Stock [Line Items] | ||||
Preferred stock, shares outstanding | 0 | |||
Convertible and Redeemable Preferred Stock [Member] | Minimum [Member] | ||||
Subsidiary Sale Of Stock [Line Items] | ||||
Convertible preferred stock carrying value | $ 35,600 | |||
Convertible and Redeemable Preferred Stock [Member] | Maximum [Member] | ||||
Subsidiary Sale Of Stock [Line Items] | ||||
Convertible preferred stock carrying value | $ 35,900 | |||
IPO [Member] | ||||
Subsidiary Sale Of Stock [Line Items] | ||||
Option to Purchase Additional Shares of Common Stock | 900,000 | |||
Shares Issued, Price Per Share | $ 16 | |||
Issuance of common stock upon initial public offering, net of issuance costs and underwriting discounts (in shares) | 6,900,000 | |||
Accretion Expense | $ 300 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | Jan. 01, 2022 USD ($) | Dec. 31, 2020 USD ($) | |
Product Information [Line Items] | |||||
Operating segment | Segment | 1 | ||||
Reportable segment | Segment | 1 | ||||
Deferred rent | $ 0 | $ 269,000 | $ 200,000 | ||
Net losses | 47,468,000 | 9,803,000 | |||
Accumulated Deficit | 55,006,000 | 7,538,000 | |||
Working Capital | 50,300,000 | ||||
Cash and cash equivalents | 42,236,000 | 87,518,000 | $ 3,315,000 | ||
Cash, FDIC insured amount | 250,000 | ||||
Goodwill impairment | $ 16,600,000 | 16,613,000 | 0 | ||
Capitalized Software Implementation Costs | 2,200,000 | 100,000 | |||
Amortization expense related to capitalized implementation costs | 100,000 | 0 | |||
Impairment of intangible assets | 0 | 0 | |||
Operating lease right-of-use assets | 19,736,000 | 0 | 20,300,000 | ||
Operating Lease, Liability | 20,334,000 | $ 20,500,000 | |||
Selling and Marketing Expense [Member] | |||||
Product Information [Line Items] | |||||
Marketing and Advertising Expense | 0 | 400,000 | |||
General and Administrative Expense [Member] | |||||
Product Information [Line Items] | |||||
Shipping and handling charges | 1,400,000 | 1,100,000 | |||
Accrued Liabilities [Member] | |||||
Product Information [Line Items] | |||||
Contributions payable | 100,000 | 300,000 | |||
The 401(k) Plan [Member] | |||||
Product Information [Line Items] | |||||
Defined contribution plan, employer discretionary contribution amount | $ 600,000 | $ 600,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Major Classes of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Machinery and Equipment [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 15 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Office Furniture and Equipment [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Office Furniture and Equipment [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Vehicles [Member] | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 15 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 BusinessLines | |
Revenue from Contract with Customer [Abstract] | |
Number of business lines | 2 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 41,420 | $ 36,893 |
United States [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 40,103 | 35,808 |
Non-US [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 1,317 | 1,085 |
Lab Essentials [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 31,772 | 27,184 |
Clinical Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 8,445 | 6,793 |
Sample Transport [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 6 | 1,530 |
Other Product [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 1,197 | $ 1,386 |
Concentrations of Risk - Summar
Concentrations of Risk - Summary of revenues and outstanding balance of accounts receivable (Details) - Customers Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SalesRevenueNetMember | Distributor customer A [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration Risk, Percentage | 15% | 18% |
Accounts Receivable [Member] | Distributor customer A [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration Risk Percentage | 17% | 10% |
Accounts Receivable [Member] | Direct customer B [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration Risk Percentage | 15% | 16% |
Accounts Receivable [Member] | Direct customer A [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration Risk Percentage | 12% |
Concentrations of Risk - Summ_2
Concentrations of Risk - Summary of inventory purchases and outstanding balance of accounts payable (Details) - Customers Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory Purchases [Member] | Distributor customer A [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration Risk, Percentage | 37% | 40% |
Inventory Purchases [Member] | Direct supplier A [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration Risk, Percentage | 14% | 11% |
Inventory Purchases [Member] | Direct supplier B [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration Risk, Percentage | 12% | 10% |
Accounts Payable [Member] | Distributor customer A [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration Risk Percentage | 11% | 20% |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Indefinite And Definite Lived Intangible Assets [Line Items] | ||||
Financial performance description | the trailing-twelve-month and next-twelve-month enterprise value-to-revenue multiples. | |||
Goodwill impairment | $ 16,600 | $ 16,613 | $ 0 | |
Amortization of intangible assets | $ 1,148 | 1,148 | ||
Acquired finite-lived intangible assets, weighted average useful life | 4 years | |||
Impairment of intangible assets | $ 0 | $ 0 | ||
Measurement Input, Discount Rate [Member] | ||||
Indefinite And Definite Lived Intangible Assets [Line Items] | ||||
Weighted Average Cost Of Capital | 18% | |||
Measurement Input, Control Premium [Member] | ||||
Indefinite And Definite Lived Intangible Assets [Line Items] | ||||
Implied control premium | 25% |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Summary of the changes in the carrying amount of goodwill (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill Gross | $ 16,613 | $ 16,613 |
Goodwill, Accumulated Impairment Loss | 16,613 | 0 |
Goodwill, Total | $ 0 | $ 16,613 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Summary of Intangible Assets with Definite and Indefinite Lives (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Goodwill And Intangible Assets [Line Items] | ||
Intangible Assets, Gross | $ 22,099 | $ 22,099 |
Intangible Assets, Accumulated Amortization | 4,543 | 3,395 |
Intangible Assets, Net (Including Goodwill), Total | 17,556 | 18,704 |
Customer Relationships [Member] | ||
Schedule Of Goodwill And Intangible Assets [Line Items] | ||
Intangible Assets, Gross | 9,180 | 9,180 |
Intangible Assets, Accumulated Amortization | 4,543 | 3,395 |
Intangible Assets, Net (Including Goodwill), Total | 4,637 | 5,785 |
Trade Names [Member] | ||
Schedule Of Goodwill And Intangible Assets [Line Items] | ||
Intangible Assets, Gross | 12,919 | 12,919 |
Intangible Assets, Accumulated Amortization | 0 | 0 |
Intangible Assets, Net (Including Goodwill), Total | $ 12,919 | $ 12,919 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Schedule of Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 1,148 |
2024 | 1,148 |
2025 | 1,148 |
2026 | 1,148 |
2027 | 45 |
Estimated future amortization expense of definite-lived intangible assets | $ 4,637 |
Inventories, Net - Schedule of
Inventories, Net - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods, net | $ 8,368 | $ 3,172 |
Work in process | 186 | 105 |
Raw materials, net | 3,693 | 2,117 |
Total inventories, net | $ 12,247 | $ 5,394 |
Property, Plant and Equipment N
Property, Plant and Equipment Net - Schedule of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 32,383 | $ 13,466 |
Less—Accumulated depreciation | (4,520) | (2,473) |
Property, plant and equipment, after depreciation | 27,863 | 10,993 |
Construction in progress | 23,714 | 18,817 |
Total property, plant and equipment, net | 51,577 | 29,810 |
Machinery and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 19,433 | 9,942 |
Office Furniture and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 628 | 649 |
Vehicles [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 229 | 70 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 12,093 | $ 2,805 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 2,000 | $ 1,700 |
Accumulated Capitalized Interest Costs | 1,600 | $ 300 |
Long-lived assets impairment | $ 4,188 |
Leases - Schedule of maturities
Leases - Schedule of maturities of operating lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Lessee Disclosure [Abstract] | ||
2023 | $ 3,142 | |
2024 | 3,046 | |
2025 | 2,607 | |
2026 | 2,558 | |
2027 | 2,529 | |
Thereafter | 11,915 | |
Total lease payments | 25,797 | |
Less: imputed interest | (5,463) | |
Present value of lease liabilities | $ 20,334 | $ 20,500 |
Leases (Additional Information)
Leases (Additional Information) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating lease expense | $ 3.2 | |
Lease liabilities cash paid | $ 2.8 | |
Weighted-average discount rate | 4.90% | |
Weighted-average remaining lease term | 9 years 2 months 12 days | |
Rent expense | $ 1.7 | |
Maximum [Member] | ||
Remaining lease terms | 15 years | |
Minimum [Member] | ||
Remaining lease terms | 1 year |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Payroll-related | $ 2,796 | $ 2,818 |
Property, plant and equipment | 1,966 | 1,446 |
Deferred revenue | 198 | 200 |
Other | 1,243 | 1,031 |
Total current accrued liabilities | $ 6,203 | $ 5,495 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Nov. 08, 2022 | May 10, 2022 | Mar. 26, 2021 | Nov. 30, 2022 | Jul. 31, 2022 | Jan. 31, 2022 | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2023 | Oct. 31, 2022 | Oct. 05, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||||||||||||
Maximum amount borrowed | $ 5,000,000 | |||||||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 5,000,000 | 5,000,000 | ||||||||||||
Cash Received Under the Term Loan | 12,000,000 | |||||||||||||
Maximum amount borrowed at the end of month | $ 12,000,000 | |||||||||||||
Unused Borrowing Capacity Amount | $ 5,000,000 | 40,135,000 | $ 5,000,000 | |||||||||||
Contingent Revenue | $ 38,500 | $ 37,000,000 | ||||||||||||
Line of Credit Facility, Description | If any advance under the Term Loan was prepaid at any time, the prepayment fee was based on the amount being prepaid and an applicable percentage amount, such as 3%, 2%, or 1%, based on the date the prepayment is made after the closing date of the Term Loan. | If any advance under the Previous Term Loan was prepaid at any time, the prepayment fee was based on the amount being prepaid and an applicable percentage amount, such as 3%, 2%, or 1%, based on the date the prepayment was made after the closing date of the Term Loan. | ||||||||||||
Term Loan Exit Fee Rate | 5% | |||||||||||||
Net revenue requirement for the financial covenant | $ 42,500,000 | $ 32,000,000 | ||||||||||||
Term Loan | $ 12,000,000 | |||||||||||||
Payment of debt issuance costs | 172,000 | 153,000 | ||||||||||||
Long term debt | 22,135,000 | 12,000,000 | ||||||||||||
Long-term debt, net | 21,976,000 | $ 11,870,000 | ||||||||||||
Forecast [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Unused Borrowing Capacity Amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | |||||||||||
Contingent Revenue | 19,000,000 | 15,000,000 | ||||||||||||
Liquidity, line of credit | $ 15,000,000 | $ 10,000,000 | ||||||||||||
Amended Credit Agreement [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Increase Borrowing Capacity | 15,000 | |||||||||||||
Maturity date | May 01, 2027 | |||||||||||||
Net revenue requirement for the financial covenant | $ 42,500,000 | $ 38,000,000 | ||||||||||||
Long-term line of credit | $ 10,000,000 | |||||||||||||
Minimum Fee Rate [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Term Loan Exit Fee Rate | 5% | |||||||||||||
Maximum Fee Rate [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Term Loan Exit Fee Rate | 7% | |||||||||||||
LIBOR [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||||||||||
LIBOR [Member] | Amended Credit Agreement [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||||||||||
LIBOR Floor [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread on variable rate | 6.45% | |||||||||||||
LIBOR Floor [Member] | Amended Credit Agreement [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread on variable rate | 1% | |||||||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Amended Credit Agreement [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Adjusted upward rate | 0.10% | |||||||||||||
Term SOFR floor | 1% | |||||||||||||
The Facility [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum amount borrowed | $ 27,000,000 | 57,135,000 | ||||||||||||
Revolver [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Amended Credit Agreement [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Applicable Margin | 3.75% | |||||||||||||
Senior Secured Term Loan [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum amount borrowed | 22,000,000 | $ 52,135,000 | ||||||||||||
Term loan exit fee | $ 600,000 | |||||||||||||
Exit Fees Percentage of Term Loan | 5% | |||||||||||||
Payment of debt issuance costs | $ 300,000 | |||||||||||||
Term Loan [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum amount borrowed at the end of month | $ 5,135,000 | |||||||||||||
Term Loan [Member] | LIBOR [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread on variable rate | 6.45% | |||||||||||||
Term Loan [Member] | LIBOR Floor [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread on variable rate | 1% | |||||||||||||
Term Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Amended Credit Agreement [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Applicable Margin | 6.45% |
Long-Term Debt - Summary of Com
Long-Term Debt - Summary of Components of Carrying Value of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Long term debt | $ 22,135 | $ 12,000 |
Cumulative accretion of exit fee | 161 | 90 |
Unamortized debt discount and debt issuance costs | (320) | (220) |
Long-term debt, net | $ 21,976 | $ 11,870 |
Long-Term Debt - Summary of Sch
Long-Term Debt - Summary of Scheduled Maturities of Term Loan (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Long-Term Debt, Unclassified [Abstract] | |
2023 | $ 0 |
2024 | 0 |
2025 | 4,611 |
2026 | 6,456 |
2027 | 11,068 |
Total | $ 22,135 |
Convertible and Redeemable Pr_2
Convertible and Redeemable Preferred Stock - Additional Information (Details) $ in Thousands | 12 Months Ended | |||
Jun. 28, 2021 shares | Jun. 17, 2021 | Dec. 31, 2021 USD ($) shares | Dec. 31, 2022 shares | |
Temporary Equity [Line Items] | ||||
Stockholders' equity note, stock split, conversion ratio | 1.8746 | |||
Conversion of convertible and redeemable preferred stock | $ | $ 35,938 | |||
Convertible Series A Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Convertible preferred stock shares issued upon conversion | 17,512,685 | |||
Convertible preferred stock, terms of conversion | one-to-one | |||
Temporary equity, shares issued | 0 | 0 | ||
Temporary equity, shares outstanding | 0 | 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 01, 2022 | Jan. 31, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total stock-based compensation expense | $ 3,711 | $ 1,551 | |||
General and Administrative Expense | $ 28,298 | $ 20,392 | |||
Common stock, shares issued | 28,179,423 | 28,012,017 | |||
Restricted Stock Units (RSUs) [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ 100 | ||||
Stock-based compensation expense related to employee stock option | $ 100 | $ 0 | |||
Weighted-average recognition period | 5 months 1 day | ||||
Stock Options [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ 10,100 | ||||
Stock-based compensation expense related to employee stock option | $ 3,500 | 1,600 | |||
Weighted-average recognition period | 3 years 1 month 9 days | ||||
Intrinsic value of options | $ 900 | 0 | |||
Grant date fair value of shares vested | $ 6,600 | $ 400 | |||
Number of Options, Exercised | 118,900 | ||||
Number of Options, Granted | 1,507,591 | ||||
Performance Based Options [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ 500 | ||||
Total stock-based compensation expense | 3,500 | ||||
Shares outstanding, Acquired from Performance plan Issuance | 231,719 | ||||
General and Administrative Expense | $ 900 | $ 500 | |||
Number of Options, Granted | 284,682 | ||||
2021 Equity Incentive Plans [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of total common stock outstanding | 4% | ||||
Additional shares to be issued under share-based payment arrangement | 1,127,176 | ||||
Vesting period | 3 years | ||||
Increase in common stock reserved for future issuance, term period | 10 years | ||||
Common stock reserved for future issuance | 2,469,164 | ||||
2021 Equity Incentive Plans [Member] | Employees [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Vesting, description | The equity-based awards for employees will vest over a four-year period, pursuant to two different vesting schedules. For initial equity-based awards granted to employees, the first vest is generally a one-year cliff vest, followed by monthly vesting for the final three years. Thereafter, annual equity-based awards granted to employees typically vest on a monthly basis over the four-year vest term | ||||
2021 Employee Stock Purchase Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share available for future grants | 319,911 | ||||
Additional shares to be issued under share-based payment arrangement | 281,794 | ||||
Increase in common stock reserved for future issuance, term period | 10 years | ||||
Percentage of additional shares added on outstanding shares | 1% | ||||
Common stock reserved for future issuance | 522,442 | ||||
Maximum employee subscription rate | 15% | ||||
Discount from market price, offering date | 85% | ||||
Discount from market price, purchase date | 85% | ||||
Issuance of common stock under employee stock purchase plan (In Share) | 48,506 | 0 | |||
Employee Stock Purchase Plan, Offering Period | Offering periods are generally six months long and begin on May 15 and November 15 of each year. |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock Units (RSUs) [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Granted | 28,071 | |
Number of Share, Outstanding Ending Balance | 28,071 | |
Number of Shares, Vested and expected to vest | 28,071 | |
Weighted Average Grant Date Fair Valu per Share, Granted | $ 7.43 | |
Weighted Average Grant Date Fair Valu per Share, Outstanding Ending Balance | 7.43 | |
Weighted Average Grant Date Fair Valu per Share, Vested and expected to vest | $ 7.43 | |
Weighted Average Remaining Contractual Term, Outstanding | 5 months 1 day | |
Weighted Average Remaining Contractual Term, Vested and expected to vest | 5 months 1 day | |
Aggregate Intrinsic Value, Outstanding | $ 158 | |
Aggregate Intrinsic Value, Vested and expected to vest | $ 158 | |
Stock Options [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Options, Outstanding, Beginning balance | 2,764,112 | |
Number of Options, Granted | 1,507,591 | |
Number of Options, Exercised | (118,900) | |
Number of Options, Cancelled or forfeited | (232,047) | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Expirations in Period | (74,224) | |
Number of Options, Outstanding, Ending balance | 3,846,532 | 2,764,112 |
Number of Options, Exercisable, Ending balance | 1,354,691 | |
Number of Options, Vested and expected to vest | 3,561,850 | |
Weighted Average Exercise Price per Share, Options outstanding, Beginning balance | $ 4.63 | |
Weighted Average Exercise Price per Share, Granted | 11.14 | |
Weighted Average Exercise Price per Share, Exercised | 1.22 | |
Weighted Average Exercise Price per Share, Forfeited | (9.79) | |
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | 2.04 | |
Weighted Average Exercise Price per Share, Options outstanding, Ending balance | 7.02 | $ 4.63 |
Weighted Average Exercise Price per Share, Exercisable, Ending balance | 4.80 | |
Weighted Average Exercise Price per Share, Vested and expected to vest | $ 7.55 | |
Weighted Average Remaining Contractual Term (in years), Options outstanding | 8 years 3 months 21 days | 8 years 8 months 8 days |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 3 months 21 days | 8 years 8 months 8 days |
Weighted Average Remaining Contractual Term (in years), Exercisable | 7 years 10 months 28 days | |
Weighted Average Remaining Contractual Term (in years), Vested and expected to vest | 8 years 6 months | |
Aggregate Intrinsic Value, Options outstanding | $ 9,083 | $ 45,280 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | 9,083 | $ 45,280 |
Aggregate Intrinsic Value, Exercisable | 4,643 | |
Aggregate Intrinsic Value, Vested and expected to vest | $ 7,606 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 3,711 | $ 1,551 |
Cost of Sales [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 147 | 7 |
Research and Development Expense [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 187 | 157 |
Selling and Marketing Expense [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 504 | 66 |
General and Administrative Expense [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 2,873 | $ 1,321 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Weighted-Average Assumptions used in Black-Scholes Option-Pricing Model (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Stock Purchase Plan [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Estimated dividend yield | 0% | 0% |
Weighted-average expected stock price volatility | 43% | 25.47% |
Weighted-average risk-free interest rate | 3.70% | 0.06% |
Expected average term of options (in years) | 6 months | 6 months |
Weighted-average fair value of common stock | $ 7.20 | $ 24.63 |
Weighted-average fair value per option | $ 1.96 | $ 5.46 |
Employee Stock Option Plans [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Estimated dividend yield | 0% | 0% |
Weighted-average expected stock price volatility | 33.77% | 33.51% |
Weighted-average risk-free interest rate | 2.79% | 1.06% |
Expected average term of options (in years) | 6 years 3 months | 6 years 2 months 1 day |
Weighted-average fair value of common stock | $ 11.14 | $ 19.89 |
Weighted-average fair value per option | $ 4.18 | $ 6.45 |
Net (Loss) Income Per Share Att
Net (Loss) Income Per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Net (Loss) Income Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to stockholders | $ (47,468) | $ (9,803) |
Earnings Per Share, Diluted, Other Disclosure [Abstract] | ||
Basic weighted-average common stock outstanding | 28,083,563 | 16,087,653 |
Dilutive weighted-average common stock | 28,083,563 | 16,087,653 |
Earnings Per Share, Basic [Abstract] | ||
Basic | $ (1.69) | $ (0.61) |
Diluted | $ (1.69) | $ (0.61) |
Net (Loss) Income Per Share A_2
Net (Loss) Income Per Share Attributable to Common Stockholders - Summary of Common Stock Equivalents Excluded from Calculation of Diluted Loss per Share Attributable to Common Stockholders (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Stock options to purchase common stock | 3,208,403 | 6,814,052 |
Stock Options to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Stock options to purchase common stock | 3,208,403 | 2,206,993 |
Convertible Series A Preferred Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Stock options to purchase common stock | 0 | 4,607,059 |
Related Parties - Additional In
Related Parties - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | |
Thomas E Davis L L C | |||
Related Party Transaction [Line Items] | |||
Related party notes receivable | $ 0.5 | ||
Meeches LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Payment for Rent Expense | $ 0.3 | $ 0.3 |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 7 | 3 |
Total current | 7 | 3 |
Deferred: | ||
Federal | (2,055) | (2,604) |
State | 125 | (233) |
Total deferred | (1,930) | (2,837) |
Income tax expense (benefit) | $ (1,923) | $ (2,834) |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of the Statutory Tax Rate to the Company's Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate% | 21% | 21% |
State income tax rate | 5.60% | 2.10% |
Stock compensation | (0.50%) | (1.50%) |
Research and development credit | 0.20% | 0.60% |
Change in federal valuation allowance | (13.60%) | 0% |
Goodwill impairment | (9.00%) | 0% |
Other | 0.20% | 0.20% |
Effective tax rate % | 3.90% | 22.40% |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax Liability and Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax asset | ||
Net operating loss carryforwards | $ 8,005 | $ 3,672 |
Accrued compensation | 552 | 401 |
Stock compensation | 1,008 | 262 |
Tax credit carryforwards | 275 | 150 |
Accruals and other | 321 | 241 |
Operating lease liabilities | 5,435 | 0 |
Capitalized research and development expenses | 1,450 | 0 |
Total deferred tax asset | 17,046 | 4,726 |
Deferred tax liability | ||
Fixed assets | (1,131) | (2,429) |
Intangibles | (4,693) | (4,973) |
Operating right-of-use lease assets | (5,275) | 0 |
Total deferred tax liability | (11,099) | (7,402) |
Valuation allowance | (7,170) | (477) |
Net deferred tax liability | $ (1,223) | $ (3,153) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards expiration year | 2036 | |
Research and development tax credit carryforwards | $ 200,000 | |
Research and development tax credit carryforwards expiration year | 2035 | |
Income tax rate, percent | 3.90% | 22.40% |
Accrued interest or penalties | $ 0 | $ 0 |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 28,900,000 | |
Taxable income limitation, percent | 80% | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 30,300,000 | |
Research and development tax credit income tax year | 15 years | |
State [Member] | Research and Development Tax Credit Carryforward [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward | $ 100,000 | |
UNITED STATES | ||
Operating Loss Carryforwards [Line Items] | ||
Research and development tax credit income tax year | 5 years |
Other Financial Information - C
Other Financial Information - Change in the allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract] | ||
Beginning balance | $ 23 | $ 23 |
Provisions (benefits) | 25 | 235 |
Recoveries (write-offs), net | (26) | (235) |
Ending balance | $ 22 | $ 23 |
Other Financial Information -_2
Other Financial Information - Change in the inventory reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Accounting Estimate [Line Items] | ||
Beginning balance | $ 23 | $ 23 |
Provisions (benefits) | 25 | 235 |
Recoveries (write-offs), net | (26) | (235) |
Ending balance | 22 | 23 |
Inventory reserve [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Beginning balance | 470 | 29 |
Provisions (benefits) | 697 | 555 |
Recoveries (write-offs), net | (121) | (114) |
Ending balance | $ 1,046 | $ 470 |
Other Financial Information -_3
Other Financial Information - Change in the income tax valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Regulatory Asset [Line Items] | ||
Beginning balance | $ 23 | $ 23 |
Additions charged to expense | 25 | 235 |
Reductions charged to other accounts | (26) | (235) |
Ending balance | 22 | 23 |
Income tax valuation allowance [Member] | ||
Regulatory Asset [Line Items] | ||
Beginning balance | 477 | 0 |
Additions charged to expense | 6,693 | 477 |
Reductions charged to other accounts | 0 | 0 |
Ending balance | $ 7,170 | $ 477 |
Subsequent Events (Additional I
Subsequent Events (Additional Information) (Details) $ in Thousands | 12 Months Ended | |||||||||
Mar. 30, 2023 USD ($) | Mar. 28, 2023 USD ($) | Feb. 01, 2023 USD ($) Positions | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Oct. 31, 2022 USD ($) | Oct. 05, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Subsequent Event [Line Items] | ||||||||||
Unused Borrowing Capacity Amount | $ 5,000 | $ 40,135 | $ 5,000 | |||||||
Net revenue requirement for the financial covenant | $ 42,500 | $ 32,000 | ||||||||
Maximum amount borrowed | $ 5,000 | |||||||||
Subsequent Events [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Reduction in workforce of positions | Positions | 40 | |||||||||
Severance and other related termination benefits | $ 800 | |||||||||
Total annual cost saveing deposit | $ 4,000 | |||||||||
Subsequent Events [Member] | Amendment No.2 [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Long-term line of credit | $ 10,000 | $ 10,000 | ||||||||
Line of Credit Facility, Covenant Terms | increase in the minimum cash covenant from $10.0 million to $15.0 million on the $10.0 million in borrowings in the first half of 2024, and added the $10.0 million minimum cash covenant requirement throughout the remaining term of the Amended Credit Agreement, and (iv) reduced the requirements for trailing twelve months of net revenue for all future periods—for example, for the twelve months ending December 31, 2023, the minimum net revenue requirement was reduced from $45.0 million to $42.0 million. | |||||||||
Subsequent Events [Member] | Sales Agreement [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 50,000 | |||||||||
Commission paid, percentage | 3% | |||||||||
Subsequent Events [Member] | Amended Revolver [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Long-term line of credit | $ 10,000 | |||||||||
Subsequent Events [Member] | Maximum [Member] | Amended Credit Agreement [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Net revenue requirement for the financial covenant | $ 45,000 | |||||||||
Subsequent Events [Member] | Maximum [Member] | SOFR Floor [Member] | Amendment No.2 [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Applicable Margin | 4.50% | |||||||||
Subsequent Events [Member] | Maximum [Member] | Amended Term Loan [Member] | Amendment No.2 [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Applicable Margin | 7% | |||||||||
Debt instrument, interest rate | 8.50% | |||||||||
Subsequent Events [Member] | Maximum [Member] | Amended Revolver [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Long-term line of credit | $ 15,000 | |||||||||
Subsequent Events [Member] | Maximum [Member] | Amended Revolver [Member] | Amendment No.2 [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Applicable Margin | 4% | |||||||||
Subsequent Events [Member] | Minimum [Member] | Amended Credit Agreement [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Long-term line of credit | $ 10,000 | |||||||||
Net revenue requirement for the financial covenant | $ 42,000 | |||||||||
Subsequent Events [Member] | Minimum [Member] | SOFR Floor [Member] | Amendment No.2 [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Applicable Margin | 1% | |||||||||
Subsequent Events [Member] | Minimum [Member] | Amended Term Loan [Member] | Amendment No.2 [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Applicable Margin | 6.45% | |||||||||
Debt instrument, interest rate | 7% | |||||||||
Subsequent Events [Member] | Minimum [Member] | Amended Revolver [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Long-term line of credit | $ 10,000 | |||||||||
Subsequent Events [Member] | Minimum [Member] | Amended Revolver [Member] | Amendment No.2 [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Applicable Margin | 3.75% |