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SEC Company Response from ALPHA INNOTECH CORP (CIK 0000830736) — Jul 28, 2005

ALPHA INNOTECH CORP (CIK 0000830736)
Date: July 28, 2005 · CIK: 0000830736 · Accession: 0001170918-05-000475

AI Filing Summary & Sentiment

File numbers found in text: 001-14257

Date
July 28, 2005
Author
Not clearly detected
Form
CORRESP
Company
ALPHA INNOTECH CORP (CIK 0000830736)

Letter

RE: XTRANA, INC. RESPONSES TO STAFF COMMENTS OF JULY 21, 2005 WITH RESPECT TO:

[STUBBS ALDERTON & MARKILES, LLP LETTERHEAD]

July 28, 2005

VIA EDGAR AND OVERNIGHT DELIVERY

Securities and Exchange Commission Division of Corporation Finance Mail Stop 6010 Washington, D.C. 20549

PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A AMENDMENT NO. 1 FILED ON JULY 7, 2005 FILE NO. 001-14257

FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2004 FILE NO. 001-14257

Ladies and Gentlemen:

On behalf of Xtrana, Inc. (the "COMPANY"), we have enclosed for filing one copy of Amendment No. 2 to Preliminary Proxy Statement on Schedule 14A (the "AMENDMENT NO. 2"). In addition to filing Amendment No. 2, we hereby provide supplementally the following responses in reply to the Staff's comment letter, dated July 7, 2005 (the "COMMENT LETTER"). The factual information provided herein relating to the Company has been made available to us by the Company and by Alpha Innotech Corporation ("ALPHA INNOTECH"). Paragraph numbering used for each supplemental response set forth below corresponds to the numbering used in the Comment Letter.

GENERAL

1. WE NOTE YOUR RESPONSE TO COMMENT 4. WE ALSO NOTE THAT ON DECEMBER 2, 2005 THE BOARD APPROVED THE TRANSACTION AND DETERMINED THAT THE MERGER WAS FAIR TO AND IN THE BEST INTERESTS OF XTRANA AND ITS STOCKHOLDERS. HOWEVER, THE FAIRNESS OPINION IS DATED APRIL 21, 2005. PLEASE DISCLOSE WHAT MATERIALS THE XTRANA DIRECTORS RELIED ON IN DETERMINING THAT THE MERGER WAS FAIR TO AND IN THE BEST INTERESTS ON THE XTRANA SHAREHOLDERS.

-------------------------------------------------------------------------------- 15821 Ventura Boulevard, Suite 525, Encino, California 91436 office > 818.444.4500 fax > 818.444.4520 www.biztechlaw.com

<PAGE> Securities and Exchange Commission July 28, 2005 Page 2

The Company has included additional disclosure in the Background of the Merger section of Amendment No. 2 to the proxy statement.

The Company notes supplementally that in determining to approve the transaction, the Company's board of directors primarily relied upon its due diligence review of Alpha Innotech, its consideration of the terms of the transaction with respect to the Company and its stockholders and discussions with its financial advisors (as described in more detail in Amendment No. 2). There were no written materials or presentations relied upon by the board of directors for this purposes.

2. WE NOTE YOUR RESPONSE TO COMMENT 6. PLEASE PROVIDE US WITH A SUPPLEMENTAL ANALYSIS, INCLUDING THE UNDERLYING FACTS, SUPPORTING YOUR DETERMINATION THAT RULE 506 OF REGULATION D IS AVAILABLE TO YOU.

The Company and Alpha Innotech have determined that the issuance of the Company's shares to the Alpha Innotech shareholders pursuant to the Agreement and Plan of Merger meets the following requirements for a valid exemption from registration under the Securities Act pursuant to Rule 506 of Regulation D:

a. NUMBER OF PURCHASERS: Rule 506 requires that there are no more than 35 purchasers of the securities from the issuer, with accredited investors being excluded from this number pursuant to Rule 501(e). Alpha Innotech has 34 shareholders of record and informed us that most of these are "accredited investors" as defined in Regulation D. As result, the number of purchasers requirement will be met.

b. NATURE OF PURCHASERS: Rule 506 requires that each purchaser that is not an accredited investor must, either alone or with his purchaser representative, have such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment. It is a condition to closing of the proposed merger that each Alpha Innotech shareholder that is not an accredited investor will represent to the Company that he, she or it, either alone or with his purchaser representative, has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of the prospective investment.

c. INTEGRATION: The Company has determined that it has not conducted any offerings that might be integrated with the merger transaction that would result in Rule 506 not being available as a valid exemption.

d. INFORMATION: Rule 502(b) requires that certain financial and non-financial information regarding the issuer be furnished to all purchasers that are not accredited investors. The Company will furnish all Alpha Innotech

<PAGE> Securities and Exchange Commission July 28, 2005 Page 3

shareholders, including all such shareholders who are not accredited investors, with the financial and non-financial information specified in Rule 502(b).

e. MANNER OF OFFERING: Rule 502(c) prohibits the offer or sale of securities in a transaction exempt pursuant to Regulation D by means of any form of general solicitation or advertising. No such general solicitation or advertising will be conducted in connection with the solicitation of approval of the merger transaction by the Alpha Innotech shareholders.

f. LIMITATION ON RESALE: Rule 502(d) provides that securities issued in a Regulation D transaction will have the status of restricted securities under the Securities Act. The Company will take the following steps to assure that the purchasers of the securities are not underwriters within the meaning of the Securities Act: (i) obtain representations from each Alpha Innotech shareholder the shareholder is acquiring the Company's shares for investment purposes for his, her or its own account and not with a view of distribution of such shares; (ii) advise each Alpha Innotech shareholder and obtain representation from such shareholders that the shares have not been registered under the Securities Act and may not be sold unless they are registered under the Securities Act or pursuant to a valid exemption from registration; and (iii) placing a legend on the certificates representing the shares stating that the shares have not been registered under the Securities Act and referring to the restrictions on transfer and sale of the shares.

BACKGROUND OF THE MERGER, PAGE 18

3. PLEASE REVISE TO CLARIFY WHEN THE MENTOR GROUP WAS HIRED AND WHEN THEIR FAIRNESS OPINION WAS DELIVERED TO THE BOARD. THE MEETING AT WHICH THE FAIRNESS OPINION WAS PRESENTED SHOULD BE DESCRIBED IN THIS SECTION. ADDITIONALLY, THE PURPOSE OF THE FAIRNESS OPINION IS UNCLEAR GIVEN THAT IT IS DATED AFTER THE BOARD HAD ALREADY VOTED TO APPROVE THE MERGER. PLEASE EXPLAIN. SIMILARLY, ON PAGE 28 THE REPORT OF FAIRNESS ADVISOR IS LISTED AS ONE OF THE DIRECTORS' REASONS FOR THE MERGER. PLEASE ADVISE OR REVISE.

The Company has included additional disclosure on pages 20 and 21 of Amendment No. 2 to clarify when The Mentor Group, Inc. was engaged by the Company to render the fairness opinion and when the fairness opinion was delivered. We note supplementally that no meeting was held for the presentation of the fairness opinion, but rather The Mentor Group, Inc. delivered a copy of its fairness opinion to all members of the Company's Board of Directors.

The Company sought to obtain the fairness opinion to provide additional information for the stockholders in making their decision on whether to approve the

<PAGE> Securities and Exchange Commission July 28, 2005 Page 4

transaction and to provide independent validation of the Board's determination that the transaction is in the best interest of the Company's stockholders. In addition, the Company notes that prior to approving the merger, members of the Company's board of directors consulted The Mentor Group, Inc. In these discussions, the Company's directors described to The Mentor Group the terms of the proposed transaction and Alpha Innotech's business and financial condition, and asked The Mentor Group for their initial thoughts on the likelihood of the transaction being determined as fair to our stockholders from a financial point of view.

The Company has revised the "Board of Directors' Reasons for the Merger" section of Amendment No. 2 in response to the Staff's comments.

4. PLEASE REVISE TO DESCRIBE THE INITIAL DISCUSSIONS BETWEEN MR. CHAMBERLAIN AND MR. SNIDER IN AUGUST 2004, INCLUDING ALL DATES, ITEMS DISCUSSED AND INDIVIDUALS PRESENT.

The Company has revised the Background of the Merger section of Amendment No. 2 to include additional information in response to the Staff's comments.

5. PLEASE EXPLAIN HOW IT WAS DECIDED THAT THE XTRANA SHAREHOLDERS WOULD RETAIN 15% OF THE OUTSTANDING SHARES OF THE COMBINED COMPANY.

The percentage equity ownership of the combined company that would be retained by the Company's stockholders was determined in arms-length negotiations based on the parties' agreement of the relative values of Alpha Innotech and Xtrana, respectively. The Company believes its value in the combined company is primarily its cash and its status as a public company with its shares quoted on the OTC Bulletin Board and a "clean" reporting history.

6. PLEASE EXPLAIN HOW DR. GERDES REVISED ALPHA INNOTECH'S TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS.

The statement referred to in the Staff's comment contained a typographical error. The sentence should have stated that "Dr. Gerdes REVIEWED Alpha Innotech's technology and intellectual property rights..." The error has been corrected in Amendment No. 2. The Company further notes that this review was part of the Company's due diligence process.

7. WE NOTE YOUR DISCLOSURE THAT THE BOARD DETERMINED THAT ALPHA INNOTECH PROVIDED THE BEST POTENTIAL FOR LONG TERM VALUE TO THE XTRANA SHAREHOLDERS. WHEN WAS THE MEETING AT WHICH THIS WAS DETERMINED? WHAT WAS THIS DETERMINATION BASED ON? IF THERE WERE ANY PRESENTATIONS MADE AT THIS MEETING, PLEASE DESCRIBE THE PRESENTATIONS AND IDENTIFY THE PERSON MAKING THE PRESENTATIONS.

<PAGE> Securities and Exchange Commission July 28, 2005 Page 5

As disclosed in the proxy statement, the Company's board of directors made a formal determination to approve the transaction with Alpha Innotech was made at the December 2, 2005 board meeting. The directors' determination was made based on discussions at this meeting, as well as prior board meetings and meetings with Alpha Innotech described in the proxy statement.

In determining to approve the transaction, the Company's board of directors primarily relied upon its due diligence review of Alpha Innotech, its consideration of the terms of the transaction with respect to the Company and its stockholders and discussions with its financial advisors. The due diligence review included, without limitation, Alpha Innotech's audited annual and unaudited interim financial information, the results of the legal, technical and business due diligence investigations of Alpha Innotech conducted by the Company and its advisors, and discussions and meetings with Alpha Innotech management as described in the proxy statement. There were no written materials or presentations relied upon by the board of directors for this purposes.

As discussed in the proxy statement, the board of directors also considered the terms of the transaction as compared to terms proposed by other potential merger partners and the value that would be realized by stockholders from other strategic alternatives, including liquidation of the Company. In addition, members of the Company's board of directors consulted its financial advisor, The Mentor Group, Inc. prior to approving the Merger Agreement. In these discussions, the directors described to The Mentor Group the terms of the proposed transaction and Alpha Innotech's business and financial condition, and asked The Mentor Group for their initial thoughts on the likelihood of the transaction being determined as fair to the Company's stockholders from a financial point of view. The "Board of Directors' Reasons for the Merger" section of the proxy statement, beginning on page 27 of Amendment No. 2, describes the factors considered by the Company's board of directors in more detail.

8. PLEASE CONFIRM THAT THE ONLY MEETINGS THAT TOOK PLACE BETWEEN XTRANA AND ALPHA INNOTECH WERE THE INITIAL DISCUSSIONS WITH MR. SNIDER AND MR. CHAMBERLAIN, THE AUGUST 30, 2004 MEETING, THE SEPTEMBER 7 MEETING AND ANY MEETINGS THAT TOOK PLACE WHILE YOU WERE CONDUCTING DUE DILIGENCE.

The Company confirms that these were the only meetings.

9. PLEASE EXPLAIN WHAT "INVESTMENT REPRESENTATION LETTERS" ARE.

The investment representation letters referred to in the proxy statement are letters from the Alpha Innotech shareholders to the Company in which such shareholders will make the representations to the Company necessary to ensure compliance with Rule 506 of Regulation D under the Securities Act o 1933. The representations from the shareholders in the letters will include:

<PAGE> Securities and Exchange Commission July 28, 2005 Page 6

o that the shareholder is acquiring the Company's shares for investment purposes for his, her or its own account and not with a view of distribution of such shares;

o that the shareholders understands that the shares will be "restricted securities" under the Securities Act and cannot be transferred in the absence of

registration, or pursuant to a valid exemption from registration, under the Securities Act;

o that the shareholder has received the disclosure regarding the Company, Alpha Innotech and the merger will be provided to all Alpha Innotech shareholders;

o that the shareholder has been given an opportunity to ask and receive answers from the Company and Alpha Innotech regarding their business, operations, financial co

Show Raw Text
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                  [STUBBS ALDERTON & MARKILES, LLP LETTERHEAD]

July 28, 2005

VIA EDGAR AND OVERNIGHT DELIVERY

Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 6010
Washington, D.C. 20549

         RE:      XTRANA, INC.
                  RESPONSES TO STAFF COMMENTS OF JULY 21, 2005 WITH RESPECT TO:

                  PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A
                  AMENDMENT NO. 1
                  FILED ON JULY 7, 2005
                  FILE NO. 001-14257

                  FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2004
                  FILE NO. 001-14257

Ladies and Gentlemen:

         On behalf of Xtrana, Inc. (the "COMPANY"),  we have enclosed for filing
one copy of Amendment No. 2 to Preliminary  Proxy Statement on Schedule 14A (the
"AMENDMENT  NO. 2"). In addition to filing  Amendment  No. 2, we hereby  provide
supplementally  the following  responses in reply to the Staff's comment letter,
dated July 7, 2005 (the  "COMMENT  LETTER").  The factual  information  provided
herein  relating to the Company has been made available to us by the Company and
by Alpha Innotech  Corporation ("ALPHA INNOTECH").  Paragraph numbering used for
each supplemental  response set forth below corresponds to the numbering used in
the Comment Letter.

GENERAL

1.       WE NOTE YOUR  RESPONSE  TO COMMENT 4. WE ALSO NOTE THAT ON  DECEMBER 2,
         2005 THE BOARD APPROVED THE  TRANSACTION AND DETERMINED THAT THE MERGER
         WAS FAIR TO AND IN THE BEST  INTERESTS OF XTRANA AND ITS  STOCKHOLDERS.
         HOWEVER,  THE FAIRNESS OPINION IS DATED APRIL 21, 2005. PLEASE DISCLOSE
         WHAT MATERIALS THE XTRANA  DIRECTORS  RELIED ON IN DETERMINING THAT THE
         MERGER  WAS  FAIR  TO  AND  IN  THE  BEST   INTERESTS   ON  THE  XTRANA
         SHAREHOLDERS.

--------------------------------------------------------------------------------
          15821 Ventura Boulevard, Suite 525, Encino, California 91436
           office > 818.444.4500 fax > 818.444.4520 www.biztechlaw.com

<PAGE>
Securities and Exchange Commission
July 28, 2005
Page 2

         The Company has included additional disclosure in the Background of the
Merger section of Amendment No. 2 to the proxy statement.

         The Company notes  supplementally  that in  determining  to approve the
transaction,  the  Company's  board of directors  primarily  relied upon its due
diligence  review  of Alpha  Innotech,  its  consideration  of the  terms of the
transaction  with respect to the Company and its  stockholders  and  discussions
with its  financial  advisors (as  described in more detail in Amendment No. 2).
There were no written  materials  or  presentations  relied upon by the board of
directors for this purposes.

2.       WE  NOTE  YOUR  RESPONSE  TO  COMMENT  6.  PLEASE  PROVIDE  US  WITH  A
         SUPPLEMENTAL ANALYSIS,  INCLUDING THE UNDERLYING FACTS, SUPPORTING YOUR
         DETERMINATION THAT RULE 506 OF REGULATION D IS AVAILABLE TO YOU.

         The Company and Alpha Innotech have determined that the issuance of the
Company's  shares to the Alpha Innotech  shareholders  pursuant to the Agreement
and Plan of Merger meets the following  requirements  for a valid exemption from
registration under the Securities Act pursuant to Rule 506 of Regulation D:

         a.       NUMBER OF PURCHASERS: Rule 506 requires that there are no more
                  than 35 purchasers  of the  securities  from the issuer,  with
                  accredited  investors being excluded from this number pursuant
                  to Rule 501(e).  Alpha Innotech has 34  shareholders of record
                  and informed us that most of these are "accredited  investors"
                  as  defined  in  Regulation  D.  As  result,   the  number  of
                  purchasers requirement will be met.

         b.       NATURE OF  PURCHASERS:  Rule 506 requires that each  purchaser
                  that is not an accredited  investor must, either alone or with
                  his  purchaser   representative,   have  such   knowledge  and
                  experience  in  financial  and  business  matters  that  he is
                  capable of evaluating the merits and risks of the  prospective
                  investment.  It is a  condition  to  closing  of the  proposed
                  merger  that each Alpha  Innotech  shareholder  that is not an
                  accredited investor will represent to the Company that he, she
                  or it, either alone or with his purchaser representative,  has
                  such  knowledge  and  experience  in  financial  and  business
                  matters that he, she or it is capable of evaluating the merits
                  and risks of the prospective investment.

         c.       INTEGRATION:  The  Company  has  determined  that  it has  not
                  conducted  any  offerings  that might be  integrated  with the
                  merger  transaction  that  would  result in Rule 506 not being
                  available as a valid exemption.

         d.       INFORMATION:  Rule 502(b) requires that certain  financial and
                  non-financial information regarding the issuer be furnished to
                  all purchasers that are not accredited investors.  The Company
                  will furnish all Alpha Innotech

<PAGE>
Securities and Exchange Commission
July 28, 2005
Page 3

                  shareholders,  including  all  such  shareholders  who are not
                  accredited  investors,  with the financial  and  non-financial
                  information specified in Rule 502(b).

         e.       MANNER OF OFFERING: Rule 502(c) prohibits the offer or sale of
                  securities in a transaction exempt pursuant to Regulation D by
                  means of any form of general  solicitation or advertising.  No
                  such general  solicitation or advertising will be conducted in
                  connection  with the  solicitation  of  approval of the merger
                  transaction by the Alpha Innotech shareholders.

         f.       LIMITATION ON RESALE:  Rule 502(d)  provides  that  securities
                  issued in a Regulation D  transaction  will have the status of
                  restricted  securities  under the Securities  Act. The Company
                  will take the following steps to assure that the purchasers of
                  the securities are not underwriters  within the meaning of the
                  Securities  Act:  (i) obtain  representations  from each Alpha
                  Innotech   shareholder   the   shareholder  is  acquiring  the
                  Company's  shares for investment  purposes for his, her or its
                  own  account  and  not  with a view  of  distribution  of such
                  shares; (ii) advise each Alpha Innotech shareholder and obtain
                  representation from such shareholders that the shares have not
                  been  registered  under the Securities Act and may not be sold
                  unless  they  are  registered  under  the  Securities  Act  or
                  pursuant to a valid  exemption  from  registration;  and (iii)
                  placing a legend on the  certificates  representing the shares
                  stating  that the shares  have not been  registered  under the
                  Securities Act and referring to the  restrictions  on transfer
                  and sale of the shares.

BACKGROUND OF THE MERGER, PAGE 18

3.       PLEASE REVISE TO CLARIFY WHEN THE MENTOR GROUP WAS HIRED AND WHEN THEIR
         FAIRNESS  OPINION WAS DELIVERED TO THE BOARD.  THE MEETING AT WHICH THE
         FAIRNESS  OPINION WAS  PRESENTED  SHOULD BE DESCRIBED IN THIS  SECTION.
         ADDITIONALLY, THE PURPOSE OF THE FAIRNESS OPINION IS UNCLEAR GIVEN THAT
         IT IS DATED  AFTER THE BOARD HAD  ALREADY  VOTED TO APPROVE THE MERGER.
         PLEASE EXPLAIN. SIMILARLY, ON PAGE 28 THE REPORT OF FAIRNESS ADVISOR IS
         LISTED AS ONE OF THE DIRECTORS'  REASONS FOR THE MERGER.  PLEASE ADVISE
         OR REVISE.

         The Company has included  additional  disclosure  on pages 20 and 21 of
Amendment  No. 2 to  clarify  when The Mentor  Group,  Inc.  was  engaged by the
Company  to render  the  fairness  opinion  and when the  fairness  opinion  was
delivered.  We note supplementally that no meeting was held for the presentation
of the fairness opinion,  but rather The Mentor Group, Inc.  delivered a copy of
its fairness opinion to all members of the Company's Board of Directors.

         The Company sought to obtain the fairness opinion to provide additional
information for the  stockholders in making their decision on whether to approve
the

<PAGE>
Securities and Exchange Commission
July 28, 2005
Page 4

transaction and to provide independent  validation of the Board's  determination
that the transaction is in the best interest of the Company's  stockholders.  In
addition,  the Company notes that prior to approving the merger,  members of the
Company's  board  of  directors  consulted  The  Mentor  Group,  Inc.  In  these
discussions,  the Company's directors described to The Mentor Group the terms of
the proposed  transaction and Alpha Innotech's business and financial condition,
and asked The Mentor Group for their initial  thoughts on the  likelihood of the
transaction  being determined as fair to our stockholders from a financial point
of view.

         The  Company  has  revised  the "Board of  Directors'  Reasons  for the
Merger" section of Amendment No. 2 in response to the Staff's comments.

4.       PLEASE  REVISE  TO  DESCRIBE  THE  INITIAL   DISCUSSIONS   BETWEEN  MR.
         CHAMBERLAIN AND MR. SNIDER IN AUGUST 2004,  INCLUDING ALL DATES,  ITEMS
         DISCUSSED AND INDIVIDUALS PRESENT.

         The  Company  has  revised  the  Background  of the  Merger  section of
Amendment  No. 2 to include  additional  information  in response to the Staff's
comments.

5.       PLEASE  EXPLAIN HOW IT WAS DECIDED THAT THE XTRANA  SHAREHOLDERS  WOULD
         RETAIN 15% OF THE OUTSTANDING SHARES OF THE COMBINED COMPANY.

         The percentage  equity  ownership of the combined company that would be
retained  by  the  Company's   stockholders   was   determined  in   arms-length
negotiations  based on the parties'  agreement  of the relative  values of Alpha
Innotech  and  Xtrana,  respectively.  The  Company  believes  its  value in the
combined  company is primarily its cash and its status as a public  company with
its shares quoted on the OTC Bulletin Board and a "clean" reporting history.

6.       PLEASE EXPLAIN HOW DR. GERDES REVISED ALPHA  INNOTECH'S  TECHNOLOGY AND
         INTELLECTUAL PROPERTY RIGHTS.

         The  statement   referred  to  in  the  Staff's  comment   contained  a
typographical  error.  The sentence should have stated that "Dr. Gerdes REVIEWED
Alpha Innotech's  technology and intellectual  property rights..." The error has
been  corrected in Amendment  No. 2. The Company  further notes that this review
was part of the Company's due diligence process.

7.       WE NOTE YOUR DISCLOSURE  THAT THE BOARD  DETERMINED THAT ALPHA INNOTECH
         PROVIDED  THE  BEST  POTENTIAL  FOR  LONG  TERM  VALUE  TO  THE  XTRANA
         SHAREHOLDERS.  WHEN WAS THE MEETING AT WHICH THIS WAS DETERMINED?  WHAT
         WAS THIS  DETERMINATION  BASED ON? IF THERE WERE ANY PRESENTATIONS MADE
         AT THIS MEETING,  PLEASE  DESCRIBE THE  PRESENTATIONS  AND IDENTIFY THE
         PERSON MAKING THE PRESENTATIONS.

<PAGE>
Securities and Exchange Commission
July 28, 2005
Page 5

         As disclosed in the proxy  statement,  the Company's board of directors
made a formal  determination  to approve the transaction with Alpha Innotech was
made at the December 2, 2005 board  meeting.  The directors'  determination  was
made based on discussions  at this meeting,  as well as prior board meetings and
meetings with Alpha Innotech described in the proxy statement.

         In  determining  to approve the  transaction,  the  Company's  board of
directors primarily relied upon its due diligence review of Alpha Innotech,  its
consideration  of the terms of the  transaction  with respect to the Company and
its stockholders and discussions with its financial advisors.  The due diligence
review  included,  without  limitation,  Alpha  Innotech's  audited  annual  and
unaudited interim financial information, the results of the legal, technical and
business due diligence investigations of Alpha Innotech conducted by the Company
and its advisors, and discussions and meetings with Alpha Innotech management as
described  in  the  proxy  statement.   There  were  no  written   materials  or
presentations relied upon by the board of directors for this purposes.

         As  discussed  in the  proxy  statement,  the board of  directors  also
considered  the terms of the  transaction as compared to terms proposed by other
potential  merger  partners and the value that would be realized by stockholders
from other  strategic  alternatives,  including  liquidation of the Company.  In
addition,  members of the Company's  board of directors  consulted its financial
advisor,  The Mentor Group,  Inc.  prior to approving the Merger  Agreement.  In
these discussions,  the directors described to The Mentor Group the terms of the
proposed transaction and Alpha Innotech's business and financial condition,  and
asked The Mentor  Group for their  initial  thoughts  on the  likelihood  of the
transaction  being  determined  as fair  to the  Company's  stockholders  from a
financial  point of view.  The  "Board of  Directors'  Reasons  for the  Merger"
section  of the  proxy  statement,  beginning  on page 27 of  Amendment  No.  2,
describes the factors  considered  by the  Company's  board of directors in more
detail.

8.       PLEASE  CONFIRM THAT THE ONLY MEETINGS  THAT TOOK PLACE BETWEEN  XTRANA
         AND ALPHA INNOTECH WERE THE INITIAL DISCUSSIONS WITH MR. SNIDER AND MR.
         CHAMBERLAIN,  THE AUGUST 30, 2004 MEETING,  THE SEPTEMBER 7 MEETING AND
         ANY MEETINGS THAT TOOK PLACE WHILE YOU WERE CONDUCTING DUE DILIGENCE.

         The Company confirms that these were the only meetings.

9.       PLEASE EXPLAIN WHAT "INVESTMENT REPRESENTATION LETTERS" ARE.

         The  investment   representation  letters  referred  to  in  the  proxy
statement  are letters from the Alpha  Innotech  shareholders  to the Company in
which such shareholders will make the  representations  to the Company necessary
to ensure  compliance  with Rule 506 of Regulation D under the  Securities Act o
1933. The representations from the shareholders in the letters will include:

<PAGE>
Securities and Exchange Commission
July 28, 2005
Page 6

         o        that the  shareholder  is acquiring the  Company's  shares for
                  investment  purposes  for his,  her or its own account and not
                  with a view of distribution of such shares;

         o        that the  shareholders  understands  that the  shares  will be
                  "restricted securities" under the Securities Act and cannot be
                  transferred in the absence of

                  registration,   or   pursuant  to  a  valid   exemption   from
                  registration, under the Securities Act;

         o        that the shareholder has received the disclosure regarding the
                  Company, Alpha Innotech and the merger will be provided to all
                  Alpha Innotech shareholders;

         o        that the  shareholder has been given an opportunity to ask and
                  receive answers from the Company and Alpha Innotech  regarding
                  their  business,  operations,   financial  co