10-Q
--12-31 falseQ3000185090200018509022020-07-012020-09-300001850902us-gaap:SubsequentEventMember2021-10-082021-10-080001850902us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001850902tkno:OtherProductMember2020-01-012020-09-300001850902us-gaap:MachineryAndEquipmentMember2021-09-300001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001850902tkno:MeechesLLCMember2021-01-012021-09-300001850902us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001850902tkno:TwoThousandAndSixteenTwoThousandAndTwentyTwoThousandAndTwentyOneEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMember2021-09-300001850902us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-09-300001850902tkno:SampleTransportMember2020-07-012020-09-300001850902us-gaap:AdditionalPaidInCapitalMember2021-09-300001850902us-gaap:RetainedEarningsMember2019-12-310001850902tkno:ClinicalSolutionsMember2021-01-012021-09-300001850902us-gaap:CommonStockMember2019-12-310001850902tkno:TwoThousandAndSixteenStockPlanMember2020-01-012020-12-3100018509022021-01-012021-09-300001850902us-gaap:CommonStockMember2020-12-310001850902us-gaap:SeriesAPreferredStockMember2020-07-012020-09-300001850902tkno:RelatedPartyMember2021-09-300001850902tkno:TwoThousandAndTwentyOneEquityIncentivePlanMember2021-06-142021-06-140001850902us-gaap:RetainedEarningsMember2020-09-300001850902tkno:ThomasEDavisLLCMember2020-01-012020-12-310001850902us-gaap:RedeemableConvertiblePreferredStockMember2019-12-310001850902tkno:TwoThousandAndTwentyOneEmployeeStockPurchasePlanMember2021-06-140001850902us-gaap:ForeignCorporateDebtSecuritiesMember2020-12-310001850902tkno:LargestSupplierMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-300001850902tkno:THPMemberus-gaap:SeriesAPreferredStockMember2019-01-140001850902tkno:TwoLargestSuppliersMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-07-012020-09-300001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMembertkno:TimeBasedAndPerformanceBasedOptionsMember2021-01-012021-09-300001850902us-gaap:CustomerRelationshipsMember2020-12-3100018509022020-01-012020-09-300001850902tkno:ThomasEDavisLLCMember2020-12-310001850902us-gaap:RetainedEarningsMember2021-06-300001850902tkno:SampleTransportMember2021-01-012021-09-300001850902tkno:MeechesLLCMember2021-09-300001850902tkno:LabEssentialsMember2021-07-012021-09-300001850902us-gaap:RetainedEarningsMember2020-07-012020-09-300001850902tkno:TwoThousandAndTwentyOneEmployeeStockPurchasePlanMember2021-01-012021-09-300001850902us-gaap:SeriesAPreferredStockMember2021-07-012021-09-300001850902us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2020-12-310001850902tkno:LabEssentialsMember2020-07-012020-09-300001850902us-gaap:NonUsMember2021-07-012021-09-300001850902us-gaap:MoneyMarketFundsMember2020-12-310001850902tkno:TwoThousandAndTwentyOneEquityIncentivePlanMembersrt:BoardOfDirectorsChairmanMember2021-06-142021-06-1400018509022021-06-300001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMember2021-01-012021-09-300001850902tkno:ThomasEDavisLLCMember2017-03-012017-03-310001850902us-gaap:LondonInterbankOfferedRateLIBORMember2021-03-262021-03-260001850902us-gaap:MachineryAndEquipmentMember2020-12-310001850902us-gaap:CommonStockMember2020-06-300001850902tkno:SeniorSecuredTermLoanMember2021-03-262021-03-260001850902us-gaap:RedeemableConvertiblePreferredStockMembersrt:MinimumMember2021-09-3000018509022021-03-2600018509022020-06-300001850902us-gaap:SalesRevenueNetMembertkno:CustomerOneMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-09-300001850902us-gaap:GeneralAndAdministrativeExpenseMember2020-07-012020-09-300001850902us-gaap:RedeemableConvertiblePreferredStockMember2020-12-310001850902tkno:SampleTransportMember2020-01-012020-09-300001850902us-gaap:RetainedEarningsMember2021-07-012021-09-300001850902tkno:TwoThousandAndSixteenStockPlanMember2021-01-012021-09-300001850902us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001850902us-gaap:AdditionalPaidInCapitalMember2021-06-300001850902us-gaap:FairValueInputsLevel1Memberus-gaap:DomesticCorporateDebtSecuritiesMember2020-12-310001850902us-gaap:CommonStockMember2020-09-300001850902us-gaap:SellingAndMarketingExpenseMember2021-01-012021-09-300001850902srt:ScenarioForecastMember2022-07-012022-07-310001850902us-gaap:CommonStockMember2021-09-300001850902srt:ScenarioForecastMember2022-09-300001850902tkno:TwoThousandAndTwentyOneEmployeeStockPurchasePlanMember2021-06-142021-06-140001850902tkno:OtherProductMember2021-01-012021-09-300001850902us-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001850902tkno:TwoLargestSuppliersMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001850902us-gaap:CostOfSalesMember2021-01-012021-09-300001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMemberus-gaap:PerformanceSharesMember2021-06-140001850902us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001850902us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001850902us-gaap:NonUsMember2020-07-012020-09-300001850902srt:ScenarioForecastMember2022-01-012022-01-310001850902tkno:TwoLargestSuppliersMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-300001850902us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001850902us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembertkno:CustomerTwoMember2020-01-012020-09-300001850902us-gaap:SalesRevenueNetMembertkno:CustomerThreeMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-09-3000018509022021-06-280001850902us-gaap:CommonStockMember2021-01-012021-09-300001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001850902us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2020-12-310001850902tkno:TwoThousandAndSixteenStockPlanMember2019-01-140001850902us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001850902us-gaap:RedeemableConvertiblePreferredStockMember2021-06-3000018509022021-06-282021-06-280001850902us-gaap:SeriesAPreferredStockMember2021-09-300001850902country:US2020-01-012020-09-300001850902us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembertkno:ThreeLargestCustomersMember2021-07-012021-09-300001850902us-gaap:RedeemableConvertiblePreferredStockMember2021-09-300001850902us-gaap:ForeignCorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2020-12-310001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001850902tkno:LIBORFloorMember2021-03-262021-03-260001850902us-gaap:NonUsMember2021-01-012021-09-300001850902us-gaap:CustomerRelationshipsMember2021-09-300001850902tkno:OfficeFurnitureAndEquipmentMember2021-09-300001850902us-gaap:AdditionalPaidInCapitalMember2020-06-300001850902tkno:TwoThousandAndSixteenTwoThousandAndTwentyTwoThousandAndTwentyOneEquityIncentivePlanMember2021-01-012021-09-300001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMembertkno:TimeBasedOptionMember2020-01-012020-09-300001850902us-gaap:RedeemableConvertiblePreferredStockMember2020-09-3000018509022021-06-012021-06-300001850902us-gaap:ForeignCorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001850902tkno:MeechesLLCMember2019-09-012019-09-300001850902tkno:ClinicalSolutionsMember2020-01-012020-09-300001850902us-gaap:LeaseholdImprovementsMember2021-09-300001850902tkno:MeechesLLCMember2021-07-012021-09-300001850902tkno:TwoLargestSuppliersMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-012020-09-300001850902us-gaap:RedeemableConvertiblePreferredStockMembersrt:MaximumMember2021-09-300001850902us-gaap:ForeignCorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMember2021-06-142021-06-140001850902tkno:LargestSupplierMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-012020-12-3100018509022021-11-090001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001850902us-gaap:FairValueInputsLevel2Memberus-gaap:DomesticCorporateDebtSecuritiesMember2020-12-310001850902us-gaap:SubsequentEventMember2021-10-080001850902tkno:SeniorSecuredTermLoanMember2021-03-260001850902tkno:ThomasEDavisLLCMember2021-01-012021-09-3000018509022020-09-300001850902tkno:ThomasEDavisLLCMember2021-03-312021-03-310001850902tkno:THPMemberus-gaap:SeriesAPreferredStockMember2019-01-142019-01-140001850902tkno:TwoThousandAndTwentyOneEquityIncentivePlanMember2021-01-012021-09-300001850902us-gaap:RetainedEarningsMember2021-01-012021-09-300001850902tkno:PerformanceBasedOptionsMember2019-01-012019-01-310001850902us-gaap:IPOMember2021-06-300001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001850902us-gaap:SeriesAPreferredStockMember2021-06-280001850902us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembertkno:ThreeLargestCustomersMember2020-01-012020-09-300001850902us-gaap:SeriesAPreferredStockMember2021-01-012021-09-300001850902us-gaap:PerformanceSharesMembertkno:TwoThousandAndSixteenStockPlanMember2019-01-142019-01-140001850902us-gaap:VehiclesMember2020-12-310001850902us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001850902us-gaap:RetainedEarningsMember2020-12-310001850902us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembertkno:ThreeLargestCustomersMember2021-01-012021-09-300001850902us-gaap:FairValueInputsLevel2Member2020-12-310001850902tkno:TwoThousandAndTwentyOneEmployeeStockPurchasePlanMember2021-09-300001850902tkno:TwoThousandAndSixteenStockPlanMember2019-01-142019-01-140001850902us-gaap:CommonStockMember2021-06-300001850902tkno:MeechesLLCMember2020-01-012020-09-300001850902us-gaap:RedeemableConvertiblePreferredStockMember2021-01-012021-09-300001850902us-gaap:RetainedEarningsMember2020-06-300001850902tkno:TwoThousandAndSixteenTwoThousandAndTwentyTwoThousandAndTwentyOneEquityIncentivePlanMember2020-01-012020-12-310001850902tkno:TwoThousandAndTwentyOneEquityIncentivePlanMember2021-06-140001850902us-gaap:SalesRevenueNetMembertkno:CustomerOneMemberus-gaap:CustomerConcentrationRiskMember2021-07-012021-09-300001850902tkno:SeniorSecuredTermLoanMembersrt:ScenarioForecastMember2021-01-012021-12-310001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMember2020-01-012020-12-310001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300001850902us-gaap:SeriesAPreferredStockMember2020-01-012020-12-310001850902tkno:MeechesLLCMember2020-07-012020-09-300001850902us-gaap:LeaseholdImprovementsMember2020-12-310001850902us-gaap:SeriesAPreferredStockMember2021-06-282021-06-280001850902tkno:TwoThousandAndSixteenTwoThousandAndTwentyTwoThousandAndTwentyOneEquityIncentivePlanMember2021-09-3000018509022021-03-262021-03-260001850902tkno:OtherProductMember2021-07-012021-09-300001850902us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembertkno:CustomerTwoMember2020-07-012020-09-300001850902country:US2021-01-012021-09-300001850902us-gaap:SeriesAPreferredStockMember2020-01-012020-09-300001850902tkno:OfficeFurnitureAndEquipmentMember2020-12-310001850902tkno:ThomasEDavisLLCMember2021-09-300001850902us-gaap:SalesRevenueNetMembertkno:CustomerThreeMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-12-310001850902tkno:Covid19Member2021-09-300001850902us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembertkno:ThreeLargestCustomersMember2020-07-012020-09-300001850902us-gaap:FairValueInputsLevel3Member2020-12-310001850902us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001850902us-gaap:CostOfSalesMember2021-07-012021-09-300001850902country:US2021-07-012021-09-300001850902tkno:TwoThousandAndSixteenTwoThousandAndTwentyTwoThousandAndTwentyOneEquityIncentivePlanMemberus-gaap:OptionMember2021-09-300001850902tkno:OtherProductMember2020-07-012020-09-300001850902us-gaap:VehiclesMember2021-09-300001850902us-gaap:RetainedEarningsMember2021-09-300001850902us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001850902us-gaap:DomesticCorporateDebtSecuritiesMember2020-12-310001850902tkno:ClinicalSolutionsMember2020-07-012020-09-3000018509022021-09-300001850902us-gaap:NonUsMember2020-01-012020-09-3000018509022021-06-172021-06-170001850902us-gaap:TradeNamesMember2021-09-300001850902us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300001850902us-gaap:IPOMember2021-06-282021-06-280001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001850902us-gaap:RetainedEarningsMember2020-01-012020-09-300001850902country:US2020-07-012020-09-300001850902tkno:ClinicalSolutionsMember2021-07-012021-09-300001850902us-gaap:IPOMember2021-06-012021-06-300001850902tkno:LabEssentialsMember2021-01-012021-09-300001850902tkno:SampleTransportMember2021-07-012021-09-3000018509022021-07-012021-09-3000018509022019-12-310001850902tkno:UnrelatedPartyMember2021-09-300001850902us-gaap:RedeemableConvertiblePreferredStockMember2020-06-300001850902us-gaap:SeriesAPreferredStockMember2020-12-310001850902tkno:TimeBasedOptionMembertkno:TwoThousandAndSixteenStockPlanMember2021-01-012021-09-300001850902tkno:TimeBasedAndPerformanceBasedOptionsMembertkno:TwoThousandAndSixteenStockPlanMember2021-01-012021-09-300001850902us-gaap:AdditionalPaidInCapitalMember2020-12-310001850902tkno:LabEssentialsMember2020-01-012020-09-300001850902tkno:TwoThousandAndSixteenTwoThousandAndTwentyTwoThousandAndTwentyOneEquityIncentivePlanMember2020-12-310001850902us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2020-12-310001850902us-gaap:TradeNamesMember2020-12-310001850902us-gaap:AdditionalPaidInCapitalMember2020-09-300001850902tkno:TimeBasedOptionMembertkno:TwoThousandAndSixteenStockPlanMember2019-01-130001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMember2021-09-300001850902tkno:EmployeeMembertkno:TwoThousandAndTwentyOneEquityIncentivePlanMember2021-06-142021-06-140001850902us-gaap:DomesticCorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2020-12-310001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100018509022020-12-310001850902us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMember2021-07-012021-09-300001850902us-gaap:AdditionalPaidInCapitalMember2019-12-310001850902tkno:TwoThousandAndTwentyEquityIncentivePlanMemberus-gaap:PerformanceSharesMember2021-06-142021-06-140001850902us-gaap:FairValueInputsLevel1Member2020-12-310001850902us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-30xbrli:pureiso4217:USDxbrli:sharesxbrli:sharestkno:Segmentiso4217:USD

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended September 30, 2021

OR

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

For the transition period from to

Commission File Number: 001-40538

 

ALPHA TEKNOVA, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

94-3368109

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

2290 Bert Dr.

Hollister, CA

95023

(Address of principal executive offices)

(Zip Code)

(831) 637-1100

Registrant’s telephone number, including area code

 

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.00001 per share

 

TKNO

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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

As of November 9, 2021, the registrant had 28,011,917 shares of common stock, $0.00001 par value per share, outstanding.

 

 

 


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements relating to our financial condition, results of operations, plans, objectives, future performance and business, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “would,” “potential,” “likely,” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

our future financial performance, including our revenue, costs of revenue and operating expenses;
our ability to achieve and grow profitability;
our ability to consistently deliver high-quality, custom, made-to-order products meeting our customers’ expectations and
quality requirements, including as they increase the scale of their demand over time;
the continued adaptability and versatility of our proprietary manufacturing processes;
the longevity of our customer relationships and the likelihood that our customers substitute our products with alternatives;
the promising nature of cell and gene therapy research, the size and growth of our potential markets and our ability to
capture market share;
the impact the novel coronavirus (“COVID-19”) or any pandemic, epidemic or outbreak of infectious disease, natural
disasters, geopolitical unrest, war, terrorism, public health issues or other catastrophic events may have on our business;
the ability of our products and services to perform as expected and the reliability of the technology on which our products
and services are based;
the suitability of our products to meet customers’ growing needs and our ability to collaborate with our customers to meet
their demands;
the increasing use of messenger ribonucleic acid (“mRNA”) vaccines and therapies and the resulting demand for more
customized, Good Manufacturing Practices ("GMP") bacterial cell culture media and associated formulations over the short- and
long-terms;
our ability to make the investments required to maintain our operational excellence, including through extending our rapid
custom production capabilities;
our ability to continue to expand our total manufacturing capabilities;
our future investments to strengthen our marketing, sales, research and development (“R&D”) and technical support
organizations;
our ability to onboard new gene therapy and mRNA therapeutic customers and migrate our current customer base from
research to GMP-grade products;
our ongoing ability to hire and retain skilled personnel;
the accuracy of our estimates of market opportunity and forecasts of market growth, including our estimated total
addressable market;
regulatory developments in the United States and other foreign countries;
the impact of revenue recognition rules and other factors on our financial results;
our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012;

2

 


 

our ability to obtain, maintain and enforce intellectual property protection for our current and future products, including our ability to protect our trade secrets, trademarks and trade names; and
the increased expenses associated with being a public company.

 

We caution you that the foregoing list may not contain all the forward-looking statements made in this Quarterly Report on Form 10-Q.

 

We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy, and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. These risks are not exhaustive. Other sections of this Quarterly Report on Form 10-Q include additional factors that could adversely impact our business and financial performance. Furthermore, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

 

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform such statements to actual results or revised expectations, except as required by law.

 

3

 


 

 

ALPHA TEKNOVA, INC.

 

Form 10-Q for the Quarter Ended September 30, 2021

 

INDEX

 

 

 

 

 

Page

PART I.

 

FINANCIAL INFORMATION

 

 

Item 1.

 

Condensed Financial Statements (Unaudited)

 

5

 

 

Condensed Balance Sheets (Unaudited) at September 30, 2021 and December 31, 2020

 

5

 

 

Condensed Statements of Operations and Comprehensive Income (Loss) (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020

 

6

 

 

Condensed Statements of Convertible and Redeemable Preferred Stock and Stockholders' Equity (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020

 

7

 

 

Condensed Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2021 and 2020

 

9

 

 

Notes to Unaudited Condensed Financial Statements

 

10

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

24

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

34

Item 4.

 

Controls and Procedures

 

34

 

PART II.

 

OTHER INFORMATION

 

36

Item 1.

 

Legal Proceedings

 

36

Item 1A.

 

Risk Factors

 

37

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

70

Item 3.

 

Default Upon Senior Securities

 

70

Item 4.

 

Mine Safety Disclosures

 

70

Item 5.

 

Other Information

 

70

Item 6.

 

Exhibits

 

71

 

Signatures

 

 

 

72

 

4

 


 

PART I – FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

 

ALPHA TEKNOVA, INC.

Condensed Balance Sheets

(Unaudited)

(in thousands, except share and per share data)

 

 

 

As of
September 30, 2021

 

 

As of
December 31, 2020

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

98,013

 

 

$

3,315

 

Short-term investments - marketable securities

 

 

 

 

 

1,811

 

Accounts receivable, net of allowance for doubtful accounts of $23 thousand and $23 thousand

 

 

4,558

 

 

 

4,623

 

Inventories, net

 

 

4,403

 

 

 

3,582

 

Income taxes receivable

 

 

1,191

 

 

 

1,417

 

Prepaid expenses and other current assets

 

 

2,914

 

 

 

1,666

 

Total current assets

 

 

111,079

 

 

 

16,414

 

Property, plant and equipment, net

 

 

22,451

 

 

 

10,008

 

Goodwill

 

 

16,613

 

 

 

16,613

 

Intangible assets, net

 

 

18,991

 

 

 

19,852

 

Other non-current assets

 

 

29

 

 

 

24

 

Total assets

 

$

169,163

 

 

$

62,911

 

LIABILITIES, CONVERTIBLE AND REDEEMABLE PREFERRED STOCK
   AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

3,321

 

 

$

1,635

 

Accrued liabilities

 

 

2,883

 

 

 

2,327

 

Total current liabilities

 

 

6,204

 

 

 

3,962

 

Deferred tax liabilities

 

 

4,350

 

 

 

5,990

 

Other accrued liabilities

 

 

293

 

 

 

350

 

Long-term debt

 

 

11,826

 

 

 

 

Deferred rent

 

 

264

 

 

 

204

 

Total liabilities

 

 

22,937

 

 

 

10,506

 

Commitments and contingencies (See “Note 15—Commitments and Contingencies”)

 

 

 

 

 

 

Series A convertible and redeemable preferred stock, $0.00001 par value, zero and 9,600,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively; zero and 9,342,092 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $0 and $41,586 thousand as of September 30, 2021 and December 31, 2020, respectively.

 

 

 

 

 

35,638

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.00001 par value, 10,000,000 and zero shares authorized at September 30, 2021 and December 31, 2020, respectively, zero shares issued and outstanding at September 30, 2021 and December 31, 2020

 

 

 

 

 

 

Common stock, $0.00001 par value, 490,000,000 and 30,000,000 shares authorized at September 30, 2021 and December 31, 2020, respectively, 28,011,917 and 3,599,232 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

150,117

 

 

 

14,495

 

(Accumulated deficit) retained earnings

 

 

(3,891

)

 

 

2,265

 

Accumulated other comprehensive income

 

 

 

 

 

7

 

Total stockholders’ equity

 

 

146,226

 

 

 

16,767

 

Total liabilities, convertible and redeemable preferred stock and stockholders’ equity

 

$

169,163

 

 

$

62,911

 

 

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

5


 

ALPHA TEKNOVA, INC.

Condensed Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

(in thousands, except share and per share data)

 

 

 

For the Three Months Ended
September 30,

 

 

For the Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

9,392

 

 

$

8,984

 

 

$

26,783

 

 

$

21,140

 

Cost of sales

 

 

5,129

 

 

 

3,896

 

 

 

14,141

 

 

 

8,954

 

Gross profit

 

 

4,263

 

 

 

5,088

 

 

 

12,642

 

 

 

12,186

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

1,372

 

 

 

358

 

 

 

2,922

 

 

 

1,025

 

Sales and marketing

 

 

885

 

 

 

558

 

 

 

2,494

 

 

 

1,389

 

General and administrative

 

 

5,607

 

 

 

1,733

 

 

 

13,606

 

 

 

5,043

 

Amortization of intangible assets

 

 

287

 

 

 

287

 

 

 

861

 

 

 

861

 

Total operating expenses

 

 

8,151

 

 

 

2,936

 

 

 

19,883

 

 

 

8,318

 

(Loss) income from operations

 

 

(3,888

)

 

 

2,152

 

 

 

(7,241

)

 

 

3,868

 

Other income (expenses), net

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

(255

)

 

 

19

 

 

 

(553

)

 

 

74

 

Other expense, net

 

 

 

 

 

(2

)

 

 

(2

)

 

 

(27

)

Total other income (expenses), net

 

 

(255

)

 

 

17

 

 

 

(555

)

 

 

47

 

(Loss) income before income taxes

 

 

(4,143

)

 

 

2,169

 

 

 

(7,796

)

 

 

3,915

 

(Benefit from) provision for income taxes

 

 

(892

)

 

 

636

 

 

 

(1,640

)

 

 

922

 

Net (loss) income

 

 

(3,251

)

 

 

1,533

 

 

 

(6,156

)

 

 

2,993

 

Change in unrealized loss on available-for-sale securities, net of tax

 

 

 

 

 

(10

)

 

 

(7

)

 

 

(1

)

Comprehensive (loss) income

 

$

(3,251

)

 

$

1,523

 

 

$

(6,163

)

 

$

2,992

 

Net (loss) income available to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

 

(3,251

)

 

 

1,533

 

 

 

(6,156

)

 

 

2,993

 

Less: undistributed income attributable to preferred stockholders

 

 

 

 

 

(1,271

)

 

 

 

 

 

(2,482

)

Net (loss) income attributable to common stockholders

 

$

(3,251

)

 

$

262

 

 

$

(6,156

)

 

$

511

 

Net (loss) income per share attributable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.12

)

 

$

0.07

 

 

$

(0.51

)

 

$

0.14

 

Diluted

 

$

(0.12

)

 

$

0.07

 

 

$

(0.51

)

 

$

0.14

 

Weighted average shares used in computing net (loss) income per share
   attributable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

28,011,917

 

 

 

3,599,232

 

 

 

12,069,214

 

 

 

3,599,232

 

Diluted

 

 

28,011,917

 

 

 

3,647,675

 

 

 

12,069,214

 

 

 

3,632,321

 

 

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

6


 

ALPHA TEKNOVA, INC.

Condensed Statements of Convertible and Redeemable Preferred Stock and Stockholders’ Equity

(in thousands, except share data)

(Unaudited)

 

 

 

Convertible and
Redeemable Preferred Stock

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
other
comprehensive

 

 

Retained
Earnings
(Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

income (loss)

 

 

 Deficit)

 

 

Equity

 

Balance at June 30, 2021

 

 

 

 

$

 

 

 

 

28,011,917

 

 

$

 

 

$

149,675

 

 

$

 

 

$

(640

)

 

$

149,035

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

442

 

 

 

 

 

 

 

 

 

442

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,251

)

 

 

(3,251

)

Balance at September 30, 2021

 

 

 

 

$

 

 

 

 

28,011,917

 

 

$

 

 

$

150,117

 

 

$

 

 

$

(3,891

)

 

$

146,226

 

 

 

 

Convertible and
Redeemable Preferred Stock

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
other
comprehensive

 

 

Retained
Earnings
(Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

 Capital

 

 

 income (loss)

 

 

 Deficit)

 

 

Equity

 

Balance at June 30, 2020

 

 

9,342,092

 

 

$

35,638

 

 

 

 

3,599,232

 

 

$

 

 

$

14,195

 

 

$

29

 

 

$

155

 

 

$

14,379

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31

 

 

 

 

 

 

 

 

 

31

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10

)

 

 

 

 

 

(10

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,533

 

 

 

1,533

 

Balance at September 30, 2020

 

 

9,342,092

 

 

$

35,638

 

 

 

 

3,599,232

 

 

$

 

 

$

14,226

 

 

$

19

 

 

$

1,688

 

 

$

15,933

 

 

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

7

 


 

ALPHA TEKNOVA, INC.

Condensed Statements of Convertible and Redeemable Preferred Stock and Stockholders’ Equity (Continued)

(in thousands, except share data)

(Unaudited)

 

 

 

Convertible and
Redeemable Preferred Stock

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
other
comprehensive

 

 

Retained
Earnings
(Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

 Capital

 

 

 income (loss)

 

 

 Deficit)

 

 

 Equity

 

Balance at December 31, 2020

 

 

9,342,092

 

 

$

35,638

 

 

 

 

3,599,232

 

 

$

 

 

$

14,495

 

 

$

7

 

 

$

2,265

 

 

$

16,767

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

927

 

 

 

 

 

 

 

 

 

927

 

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

 

 

(9,342,092

)

 

 

(35,938

)

 

 

 

17,512,685

 

 

 

 

 

 

35,938

 

 

 

 

 

 

 

 

 

35,938

 

Issuance of common stock upon initial public
   offering, net of issuance costs and underwriting
   discounts

 

 

 

 

 

 

 

 

 

6,900,000

 

 

 

 

 

 

99,057

 

 

 

 

 

 

 

 

 

99,057

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,156

)

 

 

(6,156

)

Balance at September 30, 2021

 

 

 

 

$

 

 

 

 

28,011,917

 

 

$

 

 

$

150,117

 

 

$

 

 

$

(3,891

)

 

$

146,226

 

 

 

 

Convertible and
Redeemable Preferred Stock

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
other
comprehensive

 

 

Retained
Earnings
(Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

 Capital

 

 

 income (loss)

 

 

 Deficit)

 

 

 Equity

 

Balance at December 31, 2019

 

 

9,342,092

 

 

$

35,638

 

 

 

 

3,599,232

 

 

$

 

 

$

14,195

 

 

$

20

 

 

$

(1,305

)

 

$

12,910

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31

 

 

 

 

 

 

 

 

 

31

 

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,993

 

 

 

2,993

 

Balance at September 30, 2020

 

 

9,342,092

 

 

$

35,638

 

 

 

 

3,599,232

 

 

$

 

 

$

14,226

 

 

$

19

 

 

$

1,688

 

 

$

15,933

 

 

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

8

 


 

ALPHA TEKNOVA, INC.

Condensed Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Nine months ended September 30,

 

 

 

2021