United States securities and exchange commission logo
October 30, 2020
Kevin J. Knopp
Chief Executive Officer
908 Devices Inc.
645 Summer Street
Boston, MA 02210
Re: 908 Devices Inc.
Draft Registration
Statement on Form S-1
Submitted October
2, 2020
CIK No. 0001555279
Dear Mr. Knopp:
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
Prospectus Summary
Overview, page 1
1. Your Summary should
provide a balanced and factual presentation of your business.
Please revise to
discuss your competitive position and the challenges you face in
implementing your
business strategy. As a non-exhaustive list of examples only, please
revise to discuss:
The significance to
your revenues of contracting with government agencies through
the contract
procurement process, as discussed on pages 26 and 62;
Considerable time
and expense necessary to commit to sales efforts, as discussed on
page 20, and your
strategy to develop devices for a specific purpose rather than for a
Kevin J. Knopp
FirstName
908 DevicesLastNameKevin J. Knopp
Inc.
Comapany
October 30,Name908
2020 Devices Inc.
October
Page 2 30, 2020 Page 2
FirstName LastName
wide scope of needs, as discussed on pages 3 and 91; and
Competition from established market participants and new
entrants, as discussed on
page 18.
Additionally, where you discuss your estimated total addressable
market on page 5 and in
the Business section, revise to disclose assumptions underlying such
estimates and risks
related to these assumptions.
Risk Factors, page 6
2. Please add a bullet point highlighting the risks related to
concentration of ownership of
your common shares, as discussed on page 44.
Risk Factors
We have limited experience in marketing and sales and are in the early stages
of building our
sales channels....., page 16
3. On page 16 you disclose that 28% of total revenue was attributable to
two distributors,
and that you exert limited control over existing distributors under
[y]our agreements with
them. Please revise to disclose the material terms of your
distribution agreements in the
relevant section of your prospectus and file the agreements as
exhibits or tell us why you
believe such filing is not required. Refer to Item 601(b)(10) of
Regulation S-K.
Use of Proceeds, page 51
4. Revise to quantify the approximate amount of proceeds to be used for
the purposes
identified, and further explain your intentions regarding research and
development. We
note the disclosure on page 23 regarding future expansion of your
handheld products and
desktop products. Refer to Item 504 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operation
Critical Accounting Policies and Significant Judgments and Estimates
Stock Based Compensation - Determination of Fair Value of Common Stock, page 79
5. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the awards underlying your incentive
units and the reasons for
any differences between the recent valuations of your units leading up
to the IPO and the
estimated offering price. Please clarify how you considered issuances
of preferred stock
at significantly higher prices in your valuation. This information
will help facilitate our
review of your accounting for equity issuances including unit-based
compensation. Please
discuss with the staff how to submit your response.
Business
Overview, page 84
6. Please revise to disclose the basis for claiming industry-leading
expertise in applying
Kevin J. Knopp
FirstName
908 DevicesLastNameKevin J. Knopp
Inc.
Comapany
October 30,Name908
2020 Devices Inc.
October
Page 3 30, 2020 Page 3
FirstName LastName
software automation and machine learning techniques to control your
device hardware and
interpret the data streaming off your devices.
Devices, page 102
7. It appears from the disclosure here and in the risk factor on page 22
that you are
substantially dependent on your supply agreement with Spark Holland
B.V., the sole
supplier of your autosampler subassembly. Please revise to disclose
the material terms of
your contract with Spark Holland. Additionally, please revise to
summarize the material
terms of the agreements with the supplier of sampling swabs for MX908
and with
Micronit Microtechnologies B.V. Please file these agreements as
exhibits or tell us why
you believe such filing is not required. Refer to Item 601(b)(10) of
Regulation S-K.
Intellectual Property, page 105
8. We note your disclosure providing the expected expiry of your patent
portfolio grouped
by owned patents and in-licensed patents. Please revise to disclose
the scope of the patents
discussed in this section, whether such patents are owned or licensed
and the related
expiry. Additionally, we note your disclosure that certain in-licensed
patents are expected
to expire in 2020. Please revise to discuss whether such expiry is
expected to have a
material effect on your business, including any impact on future
operations and the
financial position of the company.
Licenses, page 106
9. You disclose that the UT-Battelle licenses apply to UTB-owned
technology related to
Mass Spec technology covered by such patent rights in certain
defined fields of use.
You state the UNC Agreements relate to products, services and
methods, covered by
certain patent rights owned by UNC. You state both expire when the
last patent expires
or last patent application is abandoned, unless terminated earlier.
Revise to more
specifically describe the subject of the licenses, any milestone
payments, and the expected
expiry of the last to expire patent licensed under the agreement.
Executive Compensation, page 117
10. Revise to disclose the material terms of any compensation agreement
with any member of
management or director that will be in effect at the time of this
offering.
Certain Relationships and Related Party Transactions, page 127
11. On page 129, you disclose that Dr. Ramsey receives a percentage of the
royalties you pay
to the University of North Carolina pursuant to your licensing
agreement. Disclose the
percentage of those proceeds he receives and any other material terms
of his interest in
that agreement or tell us why disclosure is not required. Refer to
Item 404 of Regulation
S-K.
Kevin J. Knopp
FirstName
908 DevicesLastNameKevin J. Knopp
Inc.
Comapany
October 30,Name908
2020 Devices Inc.
October
Page 4 30, 2020 Page 4
FirstName LastName
Principal Stockholders, page 131
12. Please identify the natural person or persons who directly or
indirectly exercise sole or
shared voting and/or dispositive power with respect to the common
stock held by UTEC 2
L.P. Refer to Item 403 of Regulation S-K.
Choice of Forum, page 137
13. We note your disclosure here and in the risk factor on page 48 that
your forum selection
provision identifies the Court of Chancery of the State of Delaware as
the exclusive forum
for certain litigation, including any "derivative action," and that a
plaintiff is required to
first bring suit in that court and the action dismissed for lack of
subject matter jurisdiction
before such claims may be brought in another state or federal court in
Delaware. Please
disclose whether this provision applies to actions arising under the
Exchange Act. In this
regard, we note that Section 27 of the Exchange Act creates exclusive
federal jurisdiction
over all suits brought to enforce any duty or liability created by the
Exchange Act or the
rules and regulations thereunder. In addition, your forum selection
provision
designates the federal district courts of the United States as the
exclusive forum for claims
arising under the Securities Act. We note that Section 22 of the
Securities Act
creates concurrent jurisdiction for federal and state courts over all
suits brought to enforce
any duty or liability created by the Securities Act or the rules and
regulations thereunder.
Please expand your disclosure to highlight the risk of uncertainty
that a court would
enforce such provision and to state that investors cannot waive
compliance with the
federal securities laws and the rules and regulations thereunder.
Item 15. Recent Sales of Unregistered Securities, page II-2
14. We note your disclosure concerning aggregate shares sold or options
granted on multiple
dates. Please revise to more specifically disclose the date of sale
and amount of securities
sold or granted and the aggregate consideration for those particular
dates. Refer to Rule
701(a) and (c) of Regulation S-K.
General
15. 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.
Kevin J. Knopp
908 Devices Inc.
October 30, 2020
Page 5
You may contact Christine Torney at 202-551-3652 or Brian Cascio at
202-551-3676 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Abby Adams at 202-551-6902 or Christine Westbrook at 202-551-5019 with
any other
questions.
Sincerely,
FirstName LastNameKevin J. Knopp
Division of
Corporation Finance
Comapany Name908 Devices Inc.
Office of Life
Sciences
October 30, 2020 Page 5
cc: Michael J. Minihan, Esq.
FirstName LastName