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United States securities and exchange commission logo
April 12, 2021
Todd Nelson
President and Chief Executive Officer
Codex DNA, Inc.
9535 Waples Street, Suite 100
San Diego, CA 92121
Re: Codex DNA, Inc.
Draft Registration
Statement on Form S-1
Submitted March 16,
2021
CIK No. 0001850079
Dear Mr. Nelson:
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.
DRS filed March 16, 2021
Prospectus Summary, page 1
1. We note your statement
on page 1 that you are a leading synthetic biology company and
your disclosure on page
2 that your product is the first and only commercially available
push-button, walkaway,
end-to-end automated workstation, which requires only a few
minutes of set up time.
Please note that these disclosures and comparisons, and similar
disclosures elsewhere,
are not appropriate unless you can provide a reasonable basis for
such statements such as
having conducted head-to-head trials. Please revise your
disclosure accordingly.
2. In the summary on page
1, you state that, We commercially launched our current
synthetic biology
solution in September 2019 our customer base was composed of 300
Todd Nelson
FirstName LastNameTodd Nelson
Codex DNA, Inc.
Comapany
April NameCodex DNA, Inc.
12, 2021
April 212, 2021 Page 2
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FirstName LastName
customers. As disclosed in the risk factor on page 30, please
discuss in the summary that
you have not sought and received regulatory clearance or approval for
any of your
products with the U.S. Food and Drug Administration. Please also
discuss in the
summary why your products are not subject to regulatory approval by
the FDA.
3. In the summary on page 1, you state that, As of March 21, 2021 our
customer base
includes 17 of the 25 largest biopharmaceutical companies in the world
ranked by 2020
revenue. Please provide a basis for such statement. In addition,
please discuss the
geographical location of your customer base.
4. We note that in the summary on page 2, you provide the overall market
size for the global
synthetic biology market. Please disclose the portion of this market
that is addressable by
the application of your products.
5. We note your statement on page 2 and similar disclosure elsewhere
that, Our BioXp
system empowers users to rapidly, accurately and reproducibly create
high quality
synthetic DNA and mRNA that is ready for use in many downstream
synthetic biology
workflows. Please revise to eliminate any suggestion that your
product is safe and
effective or to have demonstrated safety and efficacy; instead, please
limit your discussion
to any studies and trials you have may have conducted and your trial
observations.
The Codex DNA Solution, page 2
6. The disclosure in the summary should be a balanced presentation of
your business. Please
balance the description of your strengths with equally prominent
disclosure of the
challenges your face and the risks and limitations that could harm
your business or inhibit
your strategic plans. For example, but without limitation, balance
your discussion of your
solution with a discussion of your history of losses since inception
and your expectation to
incur losses in the future.
Risk Factors
"Our Loan and Security Agreement with Silicon Bank ...", page 15
7. Please disclose in greater detail the terms and conditions of the
restrictive covenant with
Silicon Valley Bank that restricts the company s ability to merge
with any other entity,
dispose of its assets, dissolve or liquidate or pay dividends. Also,
please disclose the
amount of the minimum revenue in the minimum revenue covenant.
Internal Control, page 48
8. Please provide us with an expanded explanation of the weakness you
characterize as the
"technical categorization of transactions with a supplier." Include
the accounting
guidance you relied on and the financial statement impact of this
issue. The accounting
policy for this matter should be clearly disclosed in the footnotes to
the financial
statements.
Use of Proceeds, page 53
Todd Nelson
FirstName LastNameTodd Nelson
Codex DNA, Inc.
Comapany
April NameCodex DNA, Inc.
12, 2021
April 312, 2021 Page 3
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FirstName LastName
9. We note that you may use a portion of the proceeds to repay debt.
Please provide the
disclosure required by Instruction 4 to Item 504 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview, page 63
10. The disclosure provides that you have developed and commercialized
products. Please
describe how your products have been commercialized.
11. We note your disclosure in this section and elsewhere that describes
the sale of the
registrant s common stock and preferred stock by Synthetic Genomics
to GATTACA
Mining LLC in exchange for a promissory note to SGI. Please describe
the material terms
of the sale and all consideration, including warrants. To the extent
applicable, the
registrant may cross-reference to another section in the prospectus
for further details such
as the Certain Relationships and Related Persons Transactions section.
Change in Value of Derivative Liabilities, page 66
12. Please describe the property that SGI could receive and how the amount
of the net
proceeds is determined including any agreed upon method in determining
the price per
share if there was a change of control transaction.
13. In regards to the warrants issued to SGI in its divestiture of the
registrant s capital stock,
please disclose the exercise price of the warrants or provide a cross
reference to this
information.
Results of Operations, page 68
14. The disclosure on page 69 provides that, Royalty revenue was
largely attributable to one
customer, New England Biolabs which accounted for 26% of revenue for
the period ended
December 31, 2019 and 21% for the period ended December 31, 2020.
Please disclose
the principal terms of any related agreement to pay royalties between
the New England
Biolab and the company, and file the agreement as an exhibit. See Item
601(b)(10) of
Regulation S-K.
Liquidity and Capital Resources
2021 Loan Agreement, page 73
15. Please disclose in this section Silicon Valley Bank s original
purchase of the Series A-1
convertible preferred stock which could be the exercise price of the
Preferred Warrant.
Management s Discussion and Analysis of Financial Condition and Results of
Operations
Stock-Based Compensation, page 77
16. 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
Todd Nelson
FirstName LastNameTodd Nelson
Codex DNA, Inc.
Comapany
April NameCodex DNA, Inc.
12, 2021
April 412, 2021 Page 4
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FirstName LastName
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
Manufacturing , page 108
17. We note that you have a contract manufacturing agreement with D&K
Engineering Inc.
Please file the agreement as an exhibit. See Item 601(b)(10) of
Regulation S-K.
Assumption and Cancellation of Certain Secured Promissory Notes, page 142
18. Please disclose the approximate dollar value of the issuance of the
1.8 million shares of
Series A preferred stock issued by the company to BroadOak Fund IV,
LLC and Dr.
Nelson. Please also disclose the amount of each related party s
interest in the transaction.
Please clarify whether or not the preferred stock is convertible into
common stock.
Certain Relationships and Related Party Transactions
Acquisition of SGI-DNA, Inc. by GATTACA Mining, LLC, page 142
19. Please disclose the approximate dollar value of the transaction of the
purchase of 100% of
the issued and outstanding shares of SGI-DNA (Codex DNA, Inc.) by
GATTACA Mining
from SGI. See Item 404(a)(3) of Regulation S-K. For each component of
the
consideration, please describe the approximate value.
Part II
Item 15. Recent Sale of Unregistered Securities
Issuance of Convertible Preferred Stock, page II-2
20. Please disclose the price per share and the aggregate amount of Series
Z convertible
preferred stock that was sold to SGI in 2018 or advise us why you are
not able to provide
such disclosure.
21. Please reconcile the transactions listed in this section with those in
your Certain
Relationships and Related Persons Transactions section. For example,
please include the
issuance of the series A preferred stock by the company to BroadOak
Fund IV, LLC and
Dr. Nelson.
General
22. 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.
You may contact Julie Sherman at 202-551-3640 or Al Pavot at
202-551-3738 if you
Todd Nelson
Codex DNA, Inc.
April 12, 2021
Page 5
have questions regarding comments on the financial statements and related
matters. Please
contact Tom Kluck at 202-551-3233 or Celeste Murphy at 202-551-3257 with any
other
questions.
Sincerely,
FirstName LastNameTodd Nelson
Division of
Corporation Finance
Comapany NameCodex DNA, Inc.
Office of Life
Sciences
April 12, 2021 Page 5
cc: Philip Oettinger
FirstName LastName