Alpha Teknova, Inc. [TKNO] Filings

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

10-Q 1 tkno-20230331.htm 10-Q 10-Q

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 March 31, 2023


☐	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.)
2451 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.

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 May 9, 2023, the registrant had 28,222,832 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 may include, but not be limited to, statements about:

•

our ability to meet our publicly announced guidance or other expectations about our business;

•

our future financial performance, including our revenue, costs of revenue, and operating expenses;

•

our ability to achieve and grow profitability;

•

our ability to expand our operations and increase capacity;

•

our anticipated uses of cash in the short and long terms and the sufficiency of our sources of liquidity;

•

our ability to defend against claims and mitigate adverse results from any legal proceedings against us and the merits of any claims or suits against us;

•

our ability to maintain cash and cash equivalents and limit our accounts receivable and credit risk exposure;

•

our future investments in additional facilities to facilitate our expected growth;

•

our future uses of capital to purse potential acquisitions that further or accelerate our strategy;

•

our future use of equity or debt financings to execute our business strategy;

•

our ability to take advantage of certain exemptions from various reporting requirements generally applicable to public companies;

•

our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act);

•

the impact of recent accounting pronouncements on our financial position, results of operations, or cash flows;

•

any failure to maintain effective internal controls over financial reporting or fully remediate any weaknesses in our internal controls that may arise or be identified in the future;

•

the impact of changes to our internal control over financial reporting, other than changes intended to remediate material weaknesses;

•

the impact of any pandemic, epidemic, or outbreak of infectious disease (including COVID-19), natural disasters, geopolitical unrest, war (including in Ukraine), terrorism, public health issues or other catastrophic events may have on our business and our ability to actively manage our response to these types of events;

•

our future adoption of critical accounting policies and estimates;

•

our ability to increase the scale and capacity of our manufacturing processes and systems;

•

the impact of increased competition from additional companies entering the market and the availability of more advanced technologies in the market;

•

the impact of global economic conditions on us and our customers;

•

our ability to hire and retain key personnel;

•

our ability to obtain capital on favorable terms, or at all;

•

our ability to generate future revenue growth from introducing new products to support the growing cell and gene therapy market and the increasing use of messenger ribonucleic acid (mRNA) vaccines and therapies;

•

our ability to generate future revenue growth in market segments such as cell and gene therapy, liquid biopsy, and synthetic biology;

•

the impact of inflation and increased costs on our operations, including materials, labor, and rising interest rates;

•

our ability to use cash on hand to meet current and future financial obligations, including funding our operations, debt service requirements, and capital expenditures;

•

our ability to access our invested cash or cash equivalents;

•

the enforceability of our exclusive forum provisions in our amended and restated certificate of incorporation;

•

our customers’ sensitivity to product nonconformances, defects, and errors;

•

the availability of exemption of our products from the requirements of the U.S. Food, Drug and Cosmetic Act (FDCA);

•

our ability to secure and maintain a stable supply of raw materials in the future;

•

our ability to maintain a corporate culture that contributes to our success;

•

the marketability of our products across a wide range of markets and the probability of success in our target markets;

•

regulatory developments in the United States and other countries;

•

the impact of revenue recognition rules and other factors on our financial results;

•

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 ongoing 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” in Part I, Item 1A, of our Annual Report on Form 10-K filed with the SEC on March 30, 2022 (the 2022 Annual Report on Form 10-K) 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.

Unless the context otherwise requires, the terms “Teknova,” the “Company,” “we,” “us,” and “our” in this Quarterly Report on Form 10-Q refer to Alpha Teknova, Inc.

ALPHA TEKNOVA, INC.

Form 10-Q for the Quarter Ended March 31, 2023

INDEX


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (Unaudited)	5
	Condensed Statements of Operations (Unaudited) for the Three Months Ended March 31, 2023 and 2022	5
	Condensed Balance Sheets (Unaudited) at March 31, 2023 and December 31, 2022	6
	Condensed Statements of Stockholders’ Equity (Unaudited) for the Three Months Ended March 31, 2023 and 2022	7
	Condensed Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2023 and 2022	8
	Notes to Unaudited Condensed Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
Signatures		30

PART I – FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

ALPHA TEKNOVA, INC.

Condensed Statements of Operations

(Unaudited)

(in thousands, except share and per share data)


	For the Three Months Ended March 31,
	2023			2022
Revenue	$	9,121		$	11,147
Cost of sales		6,698			5,798
Gross profit		2,423			5,349
Operating expenses:
Research and development		1,395			2,013
Sales and marketing		2,343			1,597
General and administrative		7,345			7,295
Amortization of intangible assets		286			287
Total operating expenses		11,369			11,192
Loss from operations		(8,946	)		(5,843	)
Other income (expenses), net
Interest income (expense), net		93			(13	)
Other income, net		18			—
Total other income (expenses), net		111			(13	)
Loss before income taxes		(8,835	)		(5,856	)
Benefit from income taxes		(18	)		(359	)
Net loss	$	(8,817	)	$	(5,497	)
Net loss per share—basic and diluted	$	(0.31	)	$	(0.20	)
Weighted average shares used in computing net loss per share—basic and diluted		28,181,457			28,030,971

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

ALPHA TEKNOVA, INC.

Condensed Balance Sheets

(Unaudited)

(in thousands, except share and per share data)


	As of March 31, 2023			As of December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	30,215		$	42,236
Accounts receivable, net of allowance for doubtful accounts of $24 thousand and $22 thousand		4,777			4,261
Inventories, net		12,151			12,247
Income taxes receivable		22			22
Prepaid expenses and other current assets		2,466			2,374
Total current assets		49,631			61,140
Property, plant, and equipment, net		53,733			51,577
Operating right-of-use lease assets		18,237			19,736
Intangible assets, net		17,270			17,556
Other non-current assets		2,150			2,252
Total assets	$	141,021		$	152,261
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,885		$	2,449
Accrued liabilities		4,758			6,203
Current portion of operating lease liabilities		2,011			2,223
Total current liabilities		8,654			10,875
Deferred tax liabilities		1,204			1,223
Other accrued liabilities		169			191
Long-term debt, net		22,036			21,976
Long-term operating lease liabilities		16,871			18,111
Total liabilities		48,934			52,376
Stockholders’ equity:
Preferred stock, $0.00001 par value, 10,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively, zero shares issued and outstanding at March 31, 2023 and December 31, 2022		—			—
Common stock, $0.00001 par value, 490,000,000 shares authorized at March 31, 2023 and December 31, 2022, 28,190,192 and 28,179,423 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		155,910			154,891
Accumulated deficit		(63,823	)		(55,006	)
Total stockholders’ equity		92,087			99,885
Total liabilities and stockholders’ equity	$	141,021		$	152,261

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

ALPHA TEKNOVA, INC.

Condensed Statements of Stockholders’ Equity

(in thousands, except share data)

(Unaudited)


	Common Stock				Additional Paid-in		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance at January 1, 2023		28,179,423	$	—	$	154,891	$	(55,006	)	$	99,885
Stock-based compensation		—		—		1,010		—			1,010
Issuance of common stock upon exercise of stock options		10,769		—		9		—			9
Net loss		—		—		—		(8,817	)		(8,817	)
Balance at March 31, 2023		28,190,192	$	—	$	155,910	$	(63,823	)	$	92,087


	Common Stock				Additional Paid-in		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance at January 1, 2022		28,012,017	$	—	$	150,741	$	(7,538	)	$	143,203
Stock-based compensation		—		—		787		—			787
Issuance of common stock upon exercise of stock options		30,462		—		55		—			55
Net loss		—		—		—		(5,497	)		(5,497	)
Balance at March 31, 2022		28,042,479	$	—	$	151,583	$	(13,035	)	$	138,548

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

ALPHA TEKNOVA, INC.

Condensed Statements of Cash Flows

(Unaudited)

(in thousands)


	For the Three Months Ended March 31,
	2023			2022
Operating activities:
Net loss	$	(8,817	)	$	(5,497	)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense		2			7
Inventory reserve		(144	)		(4	)
Depreciation and amortization		1,130			751
Stock-based compensation		1,010			787
Deferred taxes		(19	)		(360	)
Amortization of debt financing costs		90			46
Non-cash lease expense		47			106
Changes in operating assets and liabilities:
Accounts receivable		(518	)		(1,319	)
Inventories		240			(1,028	)
Prepaid expenses and other current assets		271			547
Other non-current assets		102			(216	)
Accounts payable		(386	)		237
Accrued liabilities		(670	)		762
Other		(22	)		(20	)
Cash used in operating activities		(7,684	)		(5,201	)
Investing activities:
Purchase of property, plant, and equipment		(4,312	)		(5,917	)
Cash used in investing activities		(4,312	)		(5,917	)
Financing activities:
Payment of offering costs		(34	)		—
Proceeds from exercise of stock options		9			55
Cash (used in) provided by financing activities		(25	)		55
Change in cash and cash equivalents		(12,021	)		(11,063	)
Cash and cash equivalents at beginning of period		42,236			87,518
Cash and cash equivalents at end of period	$	30,215		$	76,455
Supplemental cash flow disclosures:
Income taxes paid	$	—		$	—
Interest paid, net of amounts capitalized	$	110		$	—
Capitalized property, plant, and equipment included in accounts payable and accrued liabilities	$	925		$	3,884
Deferred offering costs included in accounts payable and accrued liabilities	$	329		$	—
Debt issuance costs included in accounts payable and accrued liabilities	$	30		$	—
Recognition of operating right-of-use lease asset	$	(648	)	$	20,237
Recognition of operating lease liabilities	$	(602	)	$	20,507

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

ALPHA TEKNOVA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

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.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Accounting, Presentation and Use of Estimates

The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations.

The unaudited condensed financial statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2022, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the results for the interim periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain amounts of assets, liabilities, revenue, expenses, and related disclosures at the date of the financial statements and during the reporting period. The Company’s critical and significant accounting estimates are influenced by the Company’s assessment of the economic environment. Actual results may differ from those estimates. Certain prior period amounts have been reclassified to conform to the current year’s presentation.

These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and the related notes thereto as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2022 (the 2022 Annual Report on Form 10-K). Refer to “Notes to Financial Statements—Note 2. Summary of Significant Accounting Policies,” within the 2022 Annual Report on Form 10-K for a full list of the Company’s significant accounting policies. The information in those notes has not changed except as a result of normal adjustments in the interim periods.

Teknova has determined that it operates in one reporting unit, one operating segment, and one reportable segment, as the chief operating decision maker of the Company reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

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 $8.8 million and $5.5 million in the three months ended March 31, 2023 and 2022, respectively, and have an accumulated deficit of $63.8 million as of March 31, 2023.

As of March 31, 2023, the Company had $41.0 million in working capital, which included $30.2 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 in Note 10. Long-term Debt, Net, as well as our at-the-market facility, described further in this note below. Teknova believes

that our existing cash and cash equivalents as of March 31, 2023, together with the credit facility and at-the-market facility, will enable the Company to fund its operating expenses and capital expenditure requirements for at least the next 12 months.

Teknova's principal liquidity requirements are to fund our operations and capital expenditures. The Company may, however, require or elect to secure additional financing as Teknova continues to execute its business strategy. If the Company is required or elects to raise additional funds, Teknova may do so through equity or debt financing, which may or may not be available on favorable terms and could require the Company to agree to covenants that limit our operating flexibility.

Reduction in Workforce

On February 1, 2023, the Company carried out a reduction in workforce of approximately 40 positions, aimed at reducing operating expenses. The Company incurred $0.7 million of costs in connection with the reduction in workforce related to severance pay and other termination benefits. The costs associated with the reduction in workforce were recorded in the quarter ended March 31, 2023, in general and administrative expenses.

At-the-Market Facility

On March 30, 2023, the Company entered into a sales agreement (the ATM Facility) with Cowen and Company, LLC (Cowen), under which the Company may offer and sell, from time to time, shares of its common stock having aggregate gross proceeds of up to $50.0 million. The issuance and sale of these shares pursuant to the ATM Facility are deemed “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the Securities Act), and are registered under the Securities Act. The Company will pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the ATM Facility.

The aggregate market value of shares eligible for sale under the ATM Facility will be subject to the limitations of General Instruction I.B.6 of Form S-3, to the extent required under such instruction. The prospectus supplement filed with the SEC on March 30, 2023 is only offering shares having an aggregate offering price of $14.5 million. The Company will be required to file another prospectus supplement in the event the Company decides to offer more than $14.5 million of shares in accordance with the terms of the ATM Facility, to the extent then permitted under General Instruction I.B.6 of Form S-3.

Recently Adopted Accounting Pronouncements

Effective January 1, 2023, the Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), which introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses and applied to the Company’s accounts receivable. The adoption of this standard did not have a significant impact on the Company’s condensed financial statements.

Note 3. Revenue Recognition

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 revenue, disaggregated by product category, was as follows (in thousands):


	For the Three Months Ended March 31,
	2023		2022
Lab Essentials	$	7,257	$	6,975
Clinical Solutions		1,609		3,812
Other		255		360
Total revenue	$	9,121	$	11,147

Teknova’s revenue, disaggregated by geographic region, was as follows (in thousands):


	For the Three Months Ended March 31,
	2023		2022
United States	$	8,726	$	10,820
International		395		327
Total revenue	$	9,121	$	11,147

Note 4. Concentrations of Risk

Customers

Customers who accounted for 10% or more of the Company’s revenues and outstanding balance of accounts receivable are presented as follows:


	For the Three Months Ended March 31,		As of	As of
	2023	2022	March 31, 2023	December 31, 2022
Distributor customer A	*	*	14%	15%
Distributor customer B	19%	13%	25%	17%
Direct customer A	*	15%	*	*
Direct customer B	*	12%	*	*

* Represents less than 10%.

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 are presented as follows:


	For the Three Months Ended March 31,		As of	As of
	2023	2022	March 31, 2023	December 31, 2022
Distributor supplier A	36%	30%	*	11%
Distributor supplier B	*	10%	*	*
Direct supplier A	10%	18%	*	*
Direct supplier B	*	11%	*	*

* Represents less than 10%.

The Company’s suppliers that are distributors, as opposed to direct suppliers, represent highly diversified supplier bases.

Note 5. Inventories, Net

Inventories consist of the following (in thousands):


	As of March 31, 2023		As of December 31, 2022
Finished goods, net	$	8,094	$	8,368
Work in process		155		186
Raw materials, net		3,902		3,693
Total inventories, net	$	12,151	$	12,247

Note 6. Property, Plant, and Equipment, Net

Property, plant, and equipment consist of the following (in thousands):


	As of March 31, 2023			As of December 31, 2022
Machinery and equipment	$	19,848		$	19,433
Office furniture and equipment		742			628
Vehicles		262			229
Leasehold improvements		12,150			12,093
		33,002			32,383
Less—Accumulated depreciation		(5,358	)		(4,520	)
		27,644			27,863
Construction in progress		26,089			23,714
Total property, plant, and equipment, net	$	53,733		$	51,577

For the three months ended March 31, 2023 and 2022, depreciation expense was approximately $0.8 million and $0.5 million, respectively.

Teknova capitalizes 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. For the three months ended March 31, 2023 and 2022, capitalized interest costs were $0.6 million and $0.3 million, respectively.

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 exercisable at the Company’s election. 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 $0.8 million for each of the three months ended March 31, 2023 and 2022. Cash paid for amounts included in the measurement of the lease liabilities was $0.8 million and $0.7 for the three months ended March 31, 2023 and 2022, respectively. The weighted-average discount rate is 4.9% and the weighted-average remaining lease term is 9.3 years as of March 31, 2023.

Maturities of operating lease liabilities at March 31, 2023 were as follows (in thousands):


	Amount
Remainder of 2023	$	2,167
2024		2,776
2025		2,342
2026		2,413
2027		2,416
Thereafter		11,917
Total lease payments		24,031
Less: imputed interest		(5,149	)
Present value of lease liabilities	$	18,882

Note 8. Intangible Assets, Net

The following is a summary of intangible assets with definite and indefinite lives (in thousands):

Balance at March 31, 2023

Balance at December 31, 2022

Gross

Accumulated
Amortization

Net

Gross

Accumulated
Amortization

Net

Definite Lived:

Alpha Teknova, Inc. [TKNO] Filings
10-Q	[2023-05-11]
10-K	[2023-03-30]
10-Q	[2022-11-14]
10-Q	[2022-08-11]
10-Q	[2022-05-12]
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