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June 27, 2019
Rajesh Vashist
Chief Executive Officer
SiTime Corporation
5451 Patrick Henry Drive
Santa Clara, California 95054
Re: SiTime Corporation
Draft Registration Statement on Form S-1
Filed May 31, 2019
CIK No. 0001451809
Dear Mr. Vashist:
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.
Draft Registration Statement on Form S-1 Filed May 31, 2019
Prospectus Summary, page 1
1. Please tell us whether you commissioned any of the third-party data
included in your
registration statement.
2. Please revise the first paragraph to clarify the portion of the $7.7
billion market that is
addressable with your current products and how you are "disrupting" the
market given
your current market share and declining revenues from 2017 to 2018.
Rajesh Vashist
FirstName LastNameRajesh Vashist
SiTime Corporation
Comapany NameSiTime Corporation
June 27, 2019
Page 2
June 27, 2019 Page 2
FirstName LastName
Emerging Growth Company Status, page 7
3. 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.
We currently depend on one end customer for a large portion of our revenue,
page 14
4. In light of the risk disclosed here and significance to your
operations, please disclose the
name of your largest end customer.
We may face intellectual property infringement, page 34
5. Please clarify the portion of your products affected by the patent
that is the subject of the
lawsuit.
Selected Consolidated Financial Data, page 56
6. We note the discussion on page 51 of the pro forma increase in your
issued common stock
as a result of your amended and restated certificate of incorporation.
Accordingly, please
revise the Selected Financial Data presented here and on page 11 to
include pro forma net
income (loss) per share reflecting the increase in your issued common
stock. Refer to Rule
8-05 of Regulation S-X.
The Bank of Tokyo Mitsubishi Credit Facility, page 66
7. Please tell us which exhibit addresses the renewal of the agreement
that increased the line
of credit to $50 million and extended the maturity date. Also, Section
2.1 of Exhibit 10.11
indicates that there are other agreements related to this line of
credit. If so, please file
those agreements as exhibits.
Contractual Obligations and Commitments, page 68
8. Please tell us the dollar amount of the contracts excluded from the
table based on the
criteria mentioned in the last sentence on page 68.
Rajesh Vashist
FirstName LastNameRajesh Vashist
SiTime Corporation
Comapany NameSiTime Corporation
June 27, 2019
June 27, 2019 Page 3
Page 3
FirstName LastName
Manufacturing, page 82
9. Please disclose the material terms of your supply agreement with
Bosch, including the
material obligations of the parties.
10. Please expand the disclosure in the last sentence of the third
paragraph of this section to
disclose the royalty fee or provide a range of the fee.
Management, page 86
11. Please tell us why the individual who intends to sign this document in
the capacity of
principal financial and accounting officer is not listed in the
disclosure that begins here.
Also revise your disclosure beginning on pages 93, 102 and 105, as
appropriate.
Board Composition, page 87
12. Please tell us what agreement or other document provides MegaChips the
right to have
two of seven board seats as long as it owns at least 50% of your
outstanding common
stock.
Summary Compensation Table, page 93
13. Refer to footnote 3. Clarify the amount of the bonus to which you
refer.
Commercial Agreements, page 102
14. Please revise to describe how the commission percentages paid to
MegaChips compares to
the percentages paid to your other distributors, such as those
identified on page 14.
15. Please revise to clarify the material interests of the parties
pursuant to the integration and
purchase agreement, including the minimum purchase commitments,
pricing terms and
amounts paid to date. Also revise to clarify how the terms of this
agreement, such as
pricing and purchase commitments, compare to your agreements or
purchase orders with
other customers.
Underwriting, page 116
16. Please revise to clarify the "certain conditions precedent" to the
purchase of shares by the
underwriters. Please also revise to clarify the relative proportion of
shares to be purchased
from you and the Selling Stockholder pursuant to the option to
purchase additional shares.
Other Relationships, page 119
17. Please provide more specific information regarding the past
relationships with the
underwriters mentioned in this section.
Rajesh Vashist
FirstName LastNameRajesh Vashist
SiTime Corporation
Comapany NameSiTime Corporation
June 27, 2019
June 27, 2019 Page 4
Page 4
FirstName LastName
Consolidated Balance Sheets, page F-4
18. Please disclose the accounts receivable from your parent separately
and not under the
general heading "accounts receivable". Refer to ASC paragraph
850-10-50-2.
Consolidated Statement of Cash Flows, page F-7
19. We note the significance of the $7.8 million inventory write-down
described on page F-
18. As noted in ASC 230-10-45-28 when using the indirect method all
items included in
net income that are non-cash expenses should be separately reflected
as an adjustment in
reporting net cash flow from operating activities. Further ASC
230-10-45-29 notes that
meaningful information should be disaggregated and not reported as a
net change in
operating assets including the separate reporting of changes in assets
resulting in
impairments and other changes in assets from sales of inventories in
the normal course of
business. Please revise this statement to comply. Refer also to ASC
230-10-45-7.
Note 1. The Company and Summary of Significant Accounting Policies
Revenue Recognition, page F-13
20. Please tell us how you considered the guidance to disaggregate revenue
into categories
that depict how the nature, amount, timing, and uncertainty of revenue
and cash flows are
affected by economic factors, e.g., geographical regions, customer
market or type and
sales channel. Refer to ASC 606-10-50-5 and also see ASC 606-10-55-89
through 91.
Exhibits
21. Please file as exhibits the lock-up agreements mentioned on page 111.
Please also
provide us your analysis of whether you are required to file as an
exhibit the development
and supply agreement referenced on page 14, in light of the risk
disclosed on that page.
You may contact Gary Newberry at 202-551-3761 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 Thomas Jones at 202-551-3602 or Geoffrey
Kruczek, Special
Counsel, at 202-551-3641 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of
Electronics and Machinery
cc: Jorge del Calvo, Esq.