United States securities and exchange commission logo
August 5, 2021
C sar Nivaldo Gon
Chief Executive Officer
CI&T Inc.
R. Dr. Ricardo Benetton Martins, 1,000
P lis de Tecnologia-Pr dio 23B
Campinas-State of S o Paulo
13086-902- Brazil
Re: CI&T Inc.
Draft Registration
Statement on Form F-1
Submitted July 6,
2021
CIK No. 0001868995
Dear Mr. Gon:
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 F-1 filed on July 6, 2021
Prospectus Summary, page 1
1. We note that you cite
an IDC report that the digital transformation industry will be $958
billion by 2024. Please
provide a more detailed description of the digital transformation
industry and clarify if
it entails products, services and solutions that you do not currently
offer. For example, it
appears that you will provide consulting services to help clients
with their digital
transformation, but not hardware, software or other ancillary services.
Please clarify if the
consulting services that you offer is a small subset of a broader digital
transformation
industry.
C sar Nivaldo Gon
FirstName
CI&T Inc. LastNameC sar Nivaldo Gon
Comapany
August NameCI&T Inc.
5, 2021
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Consolidated Results of Operations, page 79
2. We note that your discussion of comparative results of operations does
not fully address
material changes in financial statement line-items for the comparative
periods. Please
include a quantitative and qualitative description of the reasons and
factors underlying
material changes, including where material changes within a line item
offset one another.
In addition, you should remove vague terms such as primarily and
mainly in favor of
specific quantifications.
3. We note that on a year to year basis that your General and
Administrative Expenses was
numerically stable during 2020 and 2019, despite the recognition of a
41% year to year
growth in revenues. Further, we note the substantial decline in your
Research and
Technological Innovation Expenses from 2019 to 2020. Please identify
and explain the
drivers behind these two occurrences. Expand your discussion of known
trends and
uncertainties to address any material effects such trends may have on
your future results
of operations.
Liquidity and Capital Resources, page 83
4. Please expand your discussion of liquidity and capital resources in
accordance with Item
5B of Form 20-F. Address your planned assumption of additional debt in
the Dextra
Group acquisition and your intended use of part of the offering net
proceeds to partially
repay such debt related and the Advance Deferred Payment.
Business, page 93
5. We note that your largest client comprises approximately 20% of your
revenue for the
fiscal year ended December 31, 2021. Discuss the material terms of
your agreements with
this client, its industry vertical and whether it is based in Brazil
or the United States.
6. We note that over 90% of your employees are based in Latin America
and/or Brazil, but
47% of your revenues are derived from the United States. Please
provide more detail of
how you service clients in United States and North America. Discuss
whether the
majority of the consulting and technical work provided by your
employees is provided
from Brazil working remotely. Please clarify if your staff in the
United States are mostly
sales oriented or if you have a significant amount of consultants that
perform digital
transformation services.
7. We note that your United States business greatly expanded with your
acquisition of
Comrade Agency in 2017. Please clarify whether your operations,
services offered, and
pricing differs from Brazilian or United States clients.
Our Corporate Structure, page 98
8. Please provide more detail regarding the spin-off of CI&T IOT Com
rcio de Hardware e
Software Ltda. ("CI&T IOT"), including the size of the entity in terms
of revenue or fair
C sar Nivaldo Gon
CI&T Inc.
August 5, 2021
Page 3
market value. Please also clarify when the separation occurred or will
occur, whether
there will be any overlap in management, and if there are any
separation agreements or
restrictions for CI&T.
Principal and Selling Shareholders, page 112
9. Please provide disclosure of the natural person(s) that hold voting
and/or investment
power of the shares beneficially owned by Advent Managed Fund.
Related Party Agreements, page 114
10. We note that you spun-off Sensedia S.A. to your stockholders in July
2019 and currently
share several common members of management. Please clarify whether you
consider
transactions involving Sensedia S.A. as related party transactions.
Please also clarify
whether there were any separation agreements that materially impact
the operations of
CI&T, including any restrictions as to certain markets or industries.
Preemptive or Similar Rights, page 117
11. You disclose that your Class A and Class B shares are not entitled to
preemptive rights
upon transfer. Please clarify that your Class A shares do not have any
preemptive rights.
While your Class B shares have preemptive rights, please also clarify
whether the
prohibition of preemptive rights upon transfer includes certain shares
transferred to heirs,
successors, controlled entities and affiliates of the Class B holders
that are exempt from
the automatic conversion provisions.
12. Please clarify the mechanics of how the preemptive rights will be
calculated and
administered. Clarify whether the proportionate ownership and voting
percentage to be
maintained is as of the close of the IPO and if it adjusts as the
Class B holders waive
exercising future preemptive rights. Also, please clarify whether the
preemptive rights
exist for equity-based compensation and/or convertible securities.
Financial Statements
28 Subsequent Events, page F-55
13. We note the approval on February 26, 2021 of the third and fourth Stock
Option
Programs. Please provide us with a chronological breakdown of the
details of all stock-
based compensation awards granted during 2021 and through the current
date, including
the fair value of the underlying stock used to value such awards. To the
extent there were
FirstName LastNameC sar Nivaldo Gon
any significant fluctuations in the fair values, please describe for us
the factors that
Comapany NameCI&T
contributed Inc.fluctuations, including any intervening events
within the company or
to such
Augustchanges
5, 2021 in your
Page 3 valuation assumptions or methodology.
FirstName LastName
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FirstName
CI&T Inc. LastNameC sar Nivaldo Gon
Comapany
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14. Tell us your consideration of whether or not pro forma information
prepared in
accordance with Article 11 of Regulation S-X, pursuant to Part I, Item
4A(b)i of Form F-
1, is required in light of your shareholders' April 30, 2021 decision
to spin-off of CI&T
IOT.
15. We note that your shareholders, on April 30, 2021, approved the
reverse merger of Hoshin
Empreendimentos S.A. by which Java Fundo de Investimento em Participa
es became
your direct shareholder. Explain for us how you intend to apply
reverse merger
accounting to this transaction. Tell us the following:
the nature and history of Hoshin Empreendimentos S.A.' operations
and financial
position;
the major and controlling shareholders of direct and indirect
participants in the
combination, before and after the transaction;
how you identified the accounting acquirer in the combination;
the consideration exchanged;
which set of historical financial statements do you plan to
present for the registrant
after the combination, and
whether or not there will be a change in basis for registrant as a
result of the
combination.
Recent Sales of Unregistered Securities, page II-1
16. We note that you were created as a corporate shell to facilitate the
reorganization and
eventual merger with CI&T Brazil and its operating subsidiaries and
that CI&T Brazil
received a significant investment by Advent in 2019. Please revise
this section to provide
the disclosure required by Item 701 of Regulation S-K for the past 3
fiscal years for CI&T
Brazil. Please also clarify whether Advent received Class B shares of
CI&T Brazil.
General
17. 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.
C sar Nivaldo Gon
FirstName
CI&T Inc. LastNameC sar Nivaldo Gon
Comapany
August NameCI&T Inc.
5, 2021
August
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FirstName LastName
You may contact Joseph Kempf, Senior Staff Accountant, at (202)
551-3352 or Robert
Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact Edwin
Kim, Staff
Attorney, at (202) 551-3297 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology