United States securities and exchange commission logo
May 4, 2021
Stephen Gunstream
Chief Executive Officer
Alpha Teknova, Inc.
2290 Bert Dr.
Hollister, CA 95023
Re: Alpha Teknova, Inc.
Draft Registration
Statement on Form S-1
Submitted April 5,
2021
CIK No. 0001850902
Dear Mr. Gunstream:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Cover Page
1. When known, please
disclose the Nasdaq stock market tier on which your common stock
will be listed (e.g.
Global Select Market, Global Market or Capital Market).
Prospectus Summary
Overview, page 1
2. Your Summary should
provide a balanced and factual presentation of your business.
Please revise to
discuss your competitive position and the challenges you face in
implementing your
business strategy. As a non-exhaustive list of examples only, please
revise to discuss:
Stephen Gunstream
FirstName LastNameStephen Gunstream
Alpha Teknova, Inc.
Comapany
May 4, 2021NameAlpha Teknova, Inc.
May 4,
Page 2 2021 Page 2
FirstName LastName
Your increase in revenue in 2020 due to the sale of your Sample
Transport products,
demand for which could decrease significantly, as discussed on
page 19;
Your reliance on a limited number of customers for a
significant portion of your
revenues, as discussed on page 21; and
Your competitive environment, including the fact that some of
your customers may
compete with you and others may develop in-house capabilities, as
discussed on page
21.
Additionally, where you discuss your estimated total addressable
market on page 2 and in
the Business section, revise to disclose assumptions underlying such
estimates and risks
related to these assumptions.
3. We note your statement that you have achieved an annual customer
retention rate of
approximately 97% for customers purchasing more than $10,000 worth of
your products.
Please revise to clarify what percentage of your customers have an
annual spend that
exceeds $10,000 to provide context to the figure.
Implications of Being an Emerging Growth Company and a Smaller Reporting
Company, page 6
4. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Our Sponsor, page 6
5. Please tell us why it is appropriate to identify Telegraph Hill
Partners Management
Company LLC as your "Sponsor." In this regard, please clarify whether
Telegraph Hill
Partners has any duties, obligations or roles beyond those of a
controlling stockholder. If
Telegraph Hill Partners does not have any duties or responsibilities
to you beyond those of
a controlling stockholder, please revise to refer to Telegraph Hill
Partners as your
controlling stockholder.
We depend on a limited number of customers..., page 21
6. We note the risk factor on page 21 which states that for the 2020
Successor Period, your
two largest customers accounted for 15% and 10% of your total revenue,
respectively. We
also note your disclosure on page 20 that the substantial majority of
your sales are made
on a purchase order basis, which permits your customers to cancel,
change or delay their
product purchase commitments with little or no notice. Please clarify
whether your two
largest customers proceed on a purchase order basis or whether
contractual arrangements
are in place. If so, please file such agreements as exhibits pursuant
to Item 601(b)(10) of
Regulation S-K.
Stephen Gunstream
FirstName LastNameStephen Gunstream
Alpha Teknova, Inc.
Comapany
May 4, 2021NameAlpha Teknova, Inc.
May 4,
Page 3 2021 Page 3
FirstName LastName
Use of Proceeds, page 64
7. We note your disclosure that you intend to use portions of the
proceeds of this offering to
(i) increase your manufacturing capacity and capabilities, (ii)
improve operating
efficiency, (iii) scale up your marketing, sales and R&D staff, (iv)
increase brand
awareness, (v) develop new products and services and attract new
customers and
(vi) pursue acquisition opportunities. Please specify what amounts
will be allocated to
each of these uses.. If any material amounts of other funds are
necessary to accomplish the
specified purposes, state the amounts and sources of other funds
needed for each specified
purpose and the sources. For guidance, please refer to Item 504 of
Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 76
8. You state that the increase in Lab Essentials revenue was driven by
higher average
revenue per customer and the increase in Clinical Solutions revenue
was primarily
attributable to an increased number of customers and higher average
revenue per
customer. Please clarify how much of the revenue increase is related
to price vs. volume.
Stock-Based Compensation, page 87
9. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features. Please discuss with the staff how to
submit your response.
Business, page 90
10. We note your focus on the company's ability to quickly and reliably
manufacture various
custom and/or GMP-grade products for its customers. With reference to
your disclosure at
the bottom of page 100, please revise the Business section, where
appropriate, to disclose
the percentage of your customers that purchase custom products and the
percentage that
purchase GMP-grade products, as compared to the percentage of your
customers that
purchase only stock products.
Increasing Use of mRNA Vaccines and Therapies, page 99
11. Please revise your disclosure in this section to indicate whether you
have any contracts or
commercial relationships with customers that are developing mRNA
vaccines and
therapies.
Total Addressable Market Opportunity by Segment, page 99
12. We note that the total addressable market opportunities in this
section are from a report by
Stephen Gunstream
Alpha Teknova, Inc.
May 4, 2021
Page 4
Strategic Directions International ("SDI") that was commissioned by you.
Please file
SDI's consent as an exhibit to the registration statement as required by
Section 7 of the
Securities Act and Securities Act Rule 436. Alternatively, please tell us
why a consent is
not required to be filed.
Government Regulation , page 102
13. We note your disclosure on page 102 indicating that certain of your
products are classified
as medical devices by the FDA and are subject to FDA oversight.
Please revise to
clarify whether all of your GMP-grade products are classified as medical
devices and are
therefore subject to the regulations described in this section. To the
extent that your GMP-
grade products are subject to different or additional regulations, please
revise to describe
the regulatory regime that covers your GMP-grade products or tell us why
this disclosure
would not be necessary.
You may contact Julie Sherman at 202-551-3640 or Mary Mast at
202-551-3613 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Alan Campbell at 202-551-4224 or Laura Crotty at 202-551-7614 with any
other
questions.
Sincerely,
FirstName LastNameStephen Gunstream
Division of
Corporation Finance
Comapany NameAlpha Teknova, Inc.
Office of Life
Sciences
May 4, 2021 Page 4
cc: Elizabeth A. Razzano
FirstName LastName