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Mail Stop 3030
April 21,
2017
Via E-mail
Laura A. Francis
Chief Financial Officer
SI-BONE, Inc.
3055 Olin Avenue, Suite 2200
San Jose, California 95128
Re: SI-BONE, Inc.
Amendment No. 2 to Draft Registration Statement on Form S-1
Submitted March 27, 2017
CIK No. 0001459839
Dear Ms. Francis:
We have reviewed your amended 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.
U.S. legislative or FDA or foreign regulatory reforms, page 43
1. Please update the disclosure in the third paragraph of this risk
factor and the reference to
Exhibit 4.2 on page II-2.
Capitalization, page 60
2. We see on page 61 that 4,103,090 shares of common stock issuable
upon the exercise of
the warrants outstanding as of December 31, 2016 will be excluded
from the pro forma
common shares outstanding calculation. Please reconcile the
warrants underlying these
shares of common stock to the warrants disclosed on page F-23 in
Note 9.
Laura Francis
SI-BONE, Inc.
April 21, 2017
Page 2
Dilution, page 62
3. Please disclose how the numbers and percentages in the table on page 63
would change
assuming the exercise of all outstanding options and warrants.
Factors Affecting Results of Operations, page 65
4. It appears your market share in the United States has declined since
2015 while the total
market size for iFuse in the United States remains the same. It also
appears that your
revenues during prior fiscal years have increased only slightly. Please
expand the
disclosure in the third paragraph on page 66 and second paragraph on
page 69 to clarify
the reasons for the market share decline and how it impacted your
results of operations.
Ensure your disclosure addresses any known trends or uncertainties that
are reasonably
expected to have a material effect on your results of operations. Please
also revise to
clarify the effect that changes in price and/or volume had on the
results you disclose.
Sales and Marketing Expenses, page 69
5. Your disclosure here refers to "lower headcount," but your disclosure
under "Revenue"
indicates you expanded your direct sales force. Please revise to clarify
the impact of
headcount on your sales and marketing expenses.
Our Strategy, page 83
6. Please revise to discuss how the strategy you reference has maintained
and enhanced
your leadership position, given the disclosure indicating your market
share in the United
States has declined while the total market size for your iFuse product
remains the same.
Manufacturing and Supply, page 106
7. Please expand to discuss the nature your agreement with rms Company,
which is to be
filed as Exhibit 10.8. Please also clarify the nature of each party's
obligations under this
agreement, as well as the agreement with Orchid. For example, while we
note the
disclosures on pages 21-22 regarding a lack of minimum manufacturing or
purchasing
obligations, it is unclear how the prices you pay for components is
determined and how
those prices effect your results of operations.
Principal Stockholders, page 136
8. Please revise to present the information in this section as of the most
recent practicable
date, consistent with Item 403 of Regulation S-K.
Laura Francis
SI-BONE, Inc.
April 21, 2017
Page 3
Note 10. Stock Option Plan, page F-24
9. You state in Item 15 on page II-3 that, "From June 2016 to March 2017,
we issued and
sold an aggregate of 46,447,468 shares of our Series 7 preferred stock
at $0.56 per
share." We see from your disclosure in this Note that the weighted
average exercise price
of options issued is significantly less than the selling price of your
preferred stock during
the same period and less than the exercise price of options issued
during 2015. In order to
assist us in evaluating your stock-based compensation, please provide us
with the
following information for each date you granted stock options in 2016
and the subsequent
periods:
Date of grant;
Number of shares issuable under the grants;
Exercise price per share;
Any restriction or vesting terms;
Management s estimate of the fair value of the underlying
ordinary share;
How management determined the fair value estimate;
How recent preferred share sales impacted the fair value
estimate;
Nature of any relationship between you and the recipient;
Nature and terms of any concurrent transactions with the
recipient; and
The amount of any compensation for the grant.
When pricing information for this offering is available, please tell us
the significant
reasons for any material differences between your last fair value
determination and the
mid-point of the estimated IPO price range including all material
positive and negative
events occurring during the period which could reasonably contribute to
variances in fair
value.
Note 14. Net Loss Per Share of Common Stock, page F-30
10. Please revise the filing to provide a table supporting the
calculation of pro forma
earnings per share and the pro forma weighted average-number of
shares outstanding for
all periods presented.
Laura Francis
SI-BONE, Inc.
April 21, 2017
Page 4
You may contact David Burton at (202) 551-3626 or Kevin Kuhar,
Accounting Branch
Chief, at (202) 551-3662 if you have questions regarding comments on the
financial statements
and related matters. Please contact Tom Jones at (202) 551-3602 or Geoff
Kruczek, Special
Counsel, at (202) 551-3641 with any other questions.
Sincerely,
/s/ Geoff Kruczek for
Amanda Ravitz
Assistant Director
Office of Electronics
and Machinery
cc: Matthew B. Hemington