SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

                  [STUBBS ALDERTON & MARKILES LLP LETTERHEAD]

August 11, 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 AUGUST 8, 2005 WITH RESPECT TO:

                  PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A
                  AMENDMENT NO. 2
                  FILED ON JULY 29, 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. 3 to Preliminary  Proxy Statement on Schedule 14A (the
"AMENDMENT  NO. 3"). In addition to filing  Amendment  No. 3, we hereby  provide
supplementally  the following  responses in reply to the Staff's comment letter,
dated August 8, 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.

SCHEDULE 14A
BACKGROUND OF THE MERGER, PAGE 17

1.       WE NOTE  YOUR  RESPONSE  TO  COMMENT  5 AND  YOUR  STATEMENT  THAT  THE
         CONSIDERATION  WAS BASED UPON THE  RELATIVE  VALUES  ATTRIBUTED  BY THE
         PARTIES.  PLEASE  EXPLAIN HOW EACH PARTY'S  VALUE WAS  DETERMINED.  FOR
         EXAMPLE,  HOW DID YOU VALUE YOUR STATUS AS A PUBLIC  COMPANY?  WHAT WAS
         THE  VALUE  YOU  ATTRIBUTED  TO YOUR  COMPANY  AND WHAT THE  VALUE  YOU
         ATTRIBUTED TO ALPHA INNOTECH?

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

<PAGE>
Securities and Exchange Commission
August 11, 2005
Page 2

         The Company has included additional  disclosure on page 19 of Amendment
No. 3 in response to the Staff's  comments.  The additional  disclosure reads as
follows:

         "The consideration was determined by arms-length  negotiations  between
         the  parties  and based  upon the  relative  values  attributed  by the
         parties to Alpha  Innotech's  business and Xtrana's  status of a public
         company and available cash. In connection with these negotiations,  the
         Xtrana  Board of  Directors  believed  that the  value  of  Xtrana  was
         approximately $3.2 to $3.3 million, consisting primarily of our cash at
         the  time  of $3  million  and  an  additional  $0.2  to  $0.3  million
         attributable to our status as a public company.  Our Board of Directors
         believed that the  enterprise  value of Alpha Innotech was in the range
         of approximately $14 million to $16 million,  which valuation was based
         on a multiple of approximately 1.4 to 1.5 of Alpha Innotech's  revenues
         for 2003. The Board of Directors  assumed this revenue  multiple figure
         by taking into account  revenue  multiple of comparable  companies that
         had recently been acquired of 2 to 4 times twelve month  revenues,  and
         applying a lower  multiple  to Alpha  Innotech  due to factors  such as
         Alpha  Innotech's  smaller  size and the fact that Alpha  Innotech  was
         incurring net losses."

2.       AS CURRENTLY  WRITTEN,  IT APPEARS THAT THE BOARD OF DIRECTORS APPROVED
         THE MERGER  AGREEMENT  WITH ALPHA INNOTECH ON DECEMBER 2, 2004 AND THAT
         THE BOARD ALSO  APPROVED THE FORMAL  ENGAGEMENT  OF THE MENTOR GROUP ON
         THE SAME DATE. IF THIS CHRONOLOGY IS ACCURATE, PLEASE REVISE TO CLARIFY
         THE  MENTOR  GROUP'S  BASIS  FOR  INDICATING  THAT  THERE  WAS  A  HIGH
         LIKELIHOOD  THAT THE TRANSACTION  WAS FAIR TO THE  STOCKHOLDERS  FROM A
         FINANCIAL  POINT OF VIEW. IF THE  CHRONOLOGY IS NOT ACCURATE,  DISCLOSE
         THE DATE THAT THE BOARD APPROVED THE ENGAGEMENT OF THE MENTOR GROUP.

         The Company has  included  revised  disclosure  beginning on page 20 of
Amendment  No. 3 in  response  to the Staff's  comments.  The  Company  confirms
supplementally  that the chronology is accurate.  The Company  further  confirms
supplementally  that The Mentor Group did not attend any meetings or discussions
with Alpha Innotech and was not involved in negotiations  between Alpha Innotech
and the Company.

         The Company notes supplementally that the Company's board of directors,
acting  through  James  Chamberlain,  began  speaking  with The Mentor  Group in
November 2004 with respect to the potential  transaction with Alpha Innotech and
the  possibility of engaging The Mentor Group to render a fairness  opinion with
respect to the transaction. While Mr. Chamberlain discussed an engagement of The
Mentor Group while  negotiations  with Alpha Innotech were ongoing,  the Company
did not want to incur the expense and cost of a binding  engagement until it had
reached  agreement on a definitive  agreement with Alpha Innotech.  As a result,
the Company's board formally approved the engagement of The Mentor Group

<PAGE>
Securities and Exchange Commission
August 11, 2005
Page 3

on December 2, 2004,  only after a definitive  agreement with Alpha Innotech had
been reached and approved.

         The  Company   further  notes  that  The  Mentor  Group's   preliminary
indication to Mr.  Chamberlain  as to the  likelihood of the  transaction  being
determined fair to the Company's stockholders from a financial point of view was
based on the  disclosed  initial  discussion  between  The Mentor  Group and Mr.
Chamberlain.  In this discussion,  Mr. Chamberlain described to The Mentor Group
the terms of the  proposed  transaction  and  Alpha  Innotech's  business  and a
summary of Alpha Innotech financial  statements.  While The Mentor Group did not
have chance to conduct its own  independent  due diligence  investigation  until
formally engaged,  The Mentor Group relied upon the information relayed to it by
the Company in  indicating to the Company a high  likelihood of the  transaction
being determined as fair to the Company's stockholders from a financial point of
view.  The Mentor  Group's  preliminary  indication  was  subject to its own due
diligence investigation and more formal analyses.

         The additional disclosure in Amendment No. 3 reads as follows:

                  "In  addition,  James  Chamberlain,  a member  of the Board of
         Directors,  consulted our  financial  advisor,  The Mentor Group,  Inc.
         prior to the Board of Directors  approving  the Merger  Agreement.  Mr.
         Chamberlain  first met with The Mentor  Group on or about  November 17,
         2004 to discuss the possible engagement of The Mentor Group to render a
         fairness opinion. In this meeting,  Mr. Chamberlain  outlined the basic
         structure  of the  potential  transaction,  without  identifying  Alpha
         Innotech  by  name.  The  Mentor  Group  also  discussed  with  the Mr.
         Chamberlain the amount of its fees for the proposed engagement.

                  "Mr.  Chamberlain  subsequently  talked to The Mentor Group by
         telephone  on or about  November  30,  2004.  In this  discussion,  Mr.
         Chamberlain  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 its initial  thoughts on the  likelihood  of
         the transaction  being  determined as fair to our  stockholders  from a
         financial  point of view.  While The Mentor Group had not yet conducted
         its  own  independent  due  diligence   investigation,   based  on  the
         information  provided to the The Mentor  Group by us, The Mentor  Group
         indicated to Mr.  Chamberlain that there was a high likelihood that the
         it would determine the transaction to be fair to our stockholders  from
         a financial point of view. Mr. Chamberlain subsequently described these
         conversations  with The  Mentor  Group  to the  other  directors.  This
         indication  by The Mentor Group was based upon the  description  of the
         material terms and conditions of the  transaction,  the  description of
         the  Alpha  Innotech  business  and  products  and the  Alpha  Innotech
         financial  information  provided to The Mentor  Group by us, as well as
         The Mentor Group's

<PAGE>
Securities and Exchange Commission
August 11, 2005
Page 4

         understanding  of  values  of  comparable  companies.   Based  on  this
         information  available to The Mentor Group at the time,  it conducted a
         preliminary  analyses of enterprise  valuation of Alpha  Innotech based
         upon revenue  multiples for  comparable  companies and compared this to
         the value of Xtrana  based upon its asset  value.  The  Mentor  Group's
         indication  in  these   discussions  with  the  board  was  subject  to
         completion of its own due diligence  investigation,  financial analyses
         and the delivery of its opinion letter."

3.       ALSO,  CLARIFY  HOW THE  MENTOR  GROUP'S  BELIEF  THAT THERE WAS A HIGH
         LIKELIHOOD  THAT  THE  TRANSACTION  WOULD  BE  DEEMED  TO BE  FAIR  WAS
         COMMUNICATED TO THE BOARD.

         The Company has included additional  disclosure beginning on page 20 of
Amendment No. 3 to clarify that The Mentor Group's preliminary beliefs regarding
the  transaction  were  communicated  by  telephone   conversations  with  James
Chamberlain,  who  subsequently  relayed such  discussions  to the other Company
board members.

4.       WE NOTE YOUR  STATEMENT  THAT IN APPROVING  THE  TRANSACTION  THE BOARD
         RELIED ON  DISCUSSIONS  WITH ITS FINANCIAL  ADVISORS.  PLEASE REVISE TO
         INCLUDE  DESCRIPTIONS  OF ALL THE MENTOR GROUP'S  DISCUSSIONS  WITH THE
         BOARD.

         The  Company  has  included  revised  disclosure  on pages 28 and 29 of
Amendment No. 3 in response to the Staff's  comments to include a description of
the  discussions  between The Mentor Group and James  Chamberlain  regarding the
proposed Alpha Innotech transaction. The revised disclosure reads as follows:

                  "In  addition,  James  Chamberlain,  a member  of the Board of
         Directors,  consulted our  financial  advisor,  The Mentor Group,  Inc.
         prior to the Board of Directors  approving  the Merger  Agreement.  Mr.
         Chamberlain  first met with The Mentor  Group on or about  November 17,
         2004 to discuss the possible engagement of The Mentor Group to render a
         fairness opinion. In this meeting,  Mr. Chamberlain  outlined the basic
         structure  of the  potential  transaction,  without  identifying  Alpha
         Innotech  by  name.  The  Mentor  Group  also  discussed  with  the Mr.
         Chamberlain the amount of its fees for the proposed engagement.

                  "Mr.  Chamberlain  subsequently  talked to The Mentor Group by
         telephone  on or about  November  30,  2004.  In this  discussion,  Mr.
         Chamberlain  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 its initial  thoughts on the  likelihood  of
         the transaction  being  determined as fair to our  stockholders  from a
         financial  point of view.  While The Mentor Group had not yet conducted
         its  own  independent  due  diligence   investigation,   based  on  the
         information  provided to the The Mentor  Group by us, The Mentor  Group
         indicated to Mr. Chamberlain that there was

<PAGE>
Securities and Exchange Commission
August 11, 2005
Page 5

         a high  likelihood  that the it would  determine the  transaction to be
         fair  to  our  stockholders   from  a  financial  point  of  view.  Mr.
         Chamberlain  subsequently described these conversations with The Mentor
         Group to the other  directors.  This indication by The Mentor Group was
         based upon the  description of the material terms and conditions of the
         transaction,  the  description  of  the  Alpha  Innotech  business  and
         products and the Alpha Innotech financial  information  provided to The
         Mentor  Group by us, as well as The  Mentor  Group's  understanding  of
         values of comparable companies.  Based on this information available to
         The Mentor Group at the time,  it conducted a  preliminary  analyses of
         enterprise valuation of Alpha Innotech based upon revenue multiples for
         comparable  companies  and  compared  this to the value of Xtrana based
         upon  its  asset  value.   The  Mentor  Group's   indication  in  these
         discussions  with the board was  subject to  completion  of its own due
         diligence  investigation,  financial  analyses  and the delivery of its
         opinion letter."

5.       IT APPEARS  FROM YOUR  DISCLOSURE  THAT THE MENTOR GROUP MAY HAVE BEGUN
         ITS  DUE  DILIGENCE  BEFORE  THEY  WERE  FORMALLY  ENGAGED.  IF THIS IS
         ACCURATE,  THEN  DISCLOSE THE DATE THEY BEGAN THEIR DUE  DILIGENCE  AND
         CLARIFY  WHAT  ANALYSES  HAD BEEN  COMPLETED  WHEN THE  BOARD  VOTED TO
         APPROVE  THE MERGER  AND  DISCLOSE  WHETHER  THE BOARD WAS AWARE OF THE
         OUTCOME OF THESE ANALYSES.

           The  Company  has  revised  the  disclosure  beginning  on page 20 of
Amendment  No. 3 in  response to the Staff's  comments.  The revised  disclosure
included in Amendment No. 3 is set forth in our response to comment #2 above.

OPINION OF FINANCIAL ADVISOR TO THE BOARD OF DIRECTORS, PAGE 29

6.       WE NOTE YOUR  RESPONSE  TO  COMMENT  11. YOU  CONTINUE  TO REFER TO THE
         CONDITIONS,  SCOPE,  LIMITATIONS  AND  UNDERSTANDINGS  SET FORTH IN THE
         ENGAGEMENT  LETTER.  IF THESE ARE THE SAME CONDITIONS,  LIMITATIONS AND
         UNDERSTANDINGS  SET FORTH IN THE DISCUSSION,  PLEASE REVISE TO INDICATE
         THAT  THEY  ARE  SAME  ONES  IDENTIFIED  IN THE  PRECEDING  PARAGRAPHS.
         OTHERWISE,   REVISE  TO  IDENTIFY  THE   CONDITIONS,   LIMITATIONS  AND
         UNDERSTANDINGS THAT ARE SET FORTH IN THE ENGAGEMENT LETTER.

          Amendment No. 3 includes revised  disclosure in page 33 in response to
the Staff's  comment,  which  clarifies  that the  conditions,  limitations  and
understandings are the same ones identified in the preceding paragraphs.

ALPHA INNOTECH BUSINESS AND FINANCIAL INFORMATION, PAGE 29

7.       PLEASE  REVISE TO INDICATE  WHEN THE LATEST TO EXPIRE  PATENT UNDER THE
         DIGIOPT AGREEMENT IS SCHEDULED TO EXPIRE.

<PAGE>
Securities and Exchange Commission
August 11, 2005
Page 6

         The Company has included revised disclosure on page 40 of Amendment No.
3 in response to the Staff's comments to indicate that the last patent under the
DigiOpt agreement is scheduled to expire in 2021.

RISK FACTORS,  PAGE 42 ALPHA INNOTECH HAS A HISTORY OF OPERATING  LOSSES AND MAY
INCUR FUTURE LOSSES, PAGE 42

8.       WE NOTE YOUR  RESPONSE  TO COMMENT 17 AND  REISSUE THE COMMENT IN PART.
         PLEASE REVISE TO DISCLOSE ALPHA INNOTECH'S ACCUMULATED DEFICIT.

         The Company has included revised disclosure on page 42 of Amendment No.
3 in response to the Staff's  comment to include  Alpha  Innotech's  accumulated
deficit of $14.2  million as of December 31, 2004 and $15.2  million as of March
31, 2005.

FINA