SEC Comment Letter for Pure Storage, Inc. (PSTG) (CIK 0001474432) (P) — Jul 17, 2015
Pure Storage, Inc. (PSTG) (CIK 0001474432)
Date: July 17, 2015 · CIK: 0001474432 · Accession: 0000000000-15-037340
AI Filing Summary & Sentiment
Reasoning
Letter
July 17, 2015 Scott Dietzen Chief Executive Officer Pure Storage, Inc. 650 Castro Street, Suite 400 Mountain View, California 94041
Re: Pure Storage, Inc. Amendment No. 1 to Draft Registration Statement on Form S -1 Submitted July 1, 2015 CIK No. 0001474432
Dear Mr. Dietzen :
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. Our references to prior comments are to comments in our June 11, 2015 letter .
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.
General
1. We note your response to prior comment 5 and the supplement al materials provided. Please clarify that your claim of “industry -leading NetPromoter customer satisfaction survey results” is based on the results of an internal company survey.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview, page 41
2. We note your revisions on page 42 in response to prior comment 41 where you state that you “expect that [y]our results of operations and cash flows will be impacted by the timing, size and level of success of these product development investments.” Please
Scott Dietzen Pure Storage, Inc. July 1 7, 2015 Page 2
expand this to explicitly address your expectations for future profitability, consistent with your disclosure on page 52 where you note you expect to incur operating losses and negative cash flows from operations in at le ast the near future. Refer to Section III.B. of SEC Release No. 33-8350 .
Certain Relationships and Related Person Transactions
Investor Rights Agreement, page 9 3
3. We note your response to prior comment 17 and reissue the comment. Please revise to disclose the information required by Items 404(a)(1) and (2) of Regulation S -K, such as the names of the related persons and their interest in the transaction .
Principal Stockholders, page 95
4. We note your response to prior comment 1 8. Please revise to state definitively that each of Messrs. Speiser, Dharmaraj , and Bhusri is a beneficial owner, instead of stating that they “may be deemed” to be a beneficial owner. See Instruction 2 to Item 403 of Regulation S -K and Rule 13d -3 under the Exchange Act.
Notes to Consolidated Financial Statements
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
Revenue Recognition, page F -10
5. We note your response to prior comment 21 and your added disclosure on page 42 . In an effort to understand the significance of this deliverable, p lease tell us how much revenue was allocated to the controller refresh for the periods presented. Also, please revise your disclosures here to identify this as a separate deliverable and how it is accounted for under your maintenance and support agreements.
Note 9. Equity Incentive Plans
Determination of Fair Value, page F -23
6. In view of the materiality of your stock -based compensation over the reported periods , please revise to disclose f air value information of the common stock underlying your stock options, restricted stock awards and common stock repurchases. This information is a significant assumption used to estimate your stock -based compensation pursuant to ASC 718 -10-50-2f. Simil ar disclosure should be made in your Critical Accounting Policies and Estimates - Stock -Based Compensation disclosures on page 57 .
Scott Dietzen Pure Storage, Inc. July 1 7, 2015 Page 3
Item 16. Exhibits and Financial Statement Schedules
Exhibit 99.1
7. We note that you have filed a consent of Forrester Consulting in response to prior comment 13. We refer to clauses (2), (4) and (6), which appear to disclaim liability for the Forrester Information . Please provide us with analysis supporting your conclusion that such statements are consiste nt with the liability provisions of the Securities Act . See Securities Act Rule 436 and Securities Act Section 11(a)(4).
You may contact Melissa Kindelan, Staff Accountant, at (202) 551 -3564 or Craig Wilson, Senior Assistant Chief Accountant, at (202) 551-3226 if you have questions regarding comments on the financial statements and related matters. Please contact Ji Shin, Attorney - Advisor, at (202) 551 - 3579, or in her absence, me at (202) 551 -3735 with any other questions.
Sincerely,
/s/ Barbara C. Jacobs
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July 17, 2015 Scott Dietzen Chief Executive Officer Pure Storage, Inc. 650 Castro Street, Suite 400 Mountain View, California 94041 Re: Pure Storage, Inc. Amendment No. 1 to Draft Registration Statement on Form S -1 Submitted July 1, 2015 CIK No. 0001474432 Dear Mr. Dietzen : 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. Our references to prior comments are to comments in our June 11, 2015 letter . 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. General 1. We note your response to prior comment 5 and the supplement al materials provided. Please clarify that your claim of “industry -leading NetPromoter customer satisfaction survey results” is based on the results of an internal company survey. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview, page 41 2. We note your revisions on page 42 in response to prior comment 41 where you state that you “expect that [y]our results of operations and cash flows will be impacted by the timing, size and level of success of these product development investments.” Please Scott Dietzen Pure Storage, Inc. July 1 7, 2015 Page 2 expand this to explicitly address your expectations for future profitability, consistent with your disclosure on page 52 where you note you expect to incur operating losses and negative cash flows from operations in at le ast the near future. Refer to Section III.B. of SEC Release No. 33-8350 . Certain Relationships and Related Person Transactions Investor Rights Agreement, page 9 3 3. We note your response to prior comment 17 and reissue the comment. Please revise to disclose the information required by Items 404(a)(1) and (2) of Regulation S -K, such as the names of the related persons and their interest in the transaction . Principal Stockholders, page 95 4. We note your response to prior comment 1 8. Please revise to state definitively that each of Messrs. Speiser, Dharmaraj , and Bhusri is a beneficial owner, instead of stating that they “may be deemed” to be a beneficial owner. See Instruction 2 to Item 403 of Regulation S -K and Rule 13d -3 under the Exchange Act. Notes to Consolidated Financial Statements Note 2. Basis of Presentation and Summary of Significant Accounting Policies Revenue Recognition, page F -10 5. We note your response to prior comment 21 and your added disclosure on page 42 . In an effort to understand the significance of this deliverable, p lease tell us how much revenue was allocated to the controller refresh for the periods presented. Also, please revise your disclosures here to identify this as a separate deliverable and how it is accounted for under your maintenance and support agreements. Note 9. Equity Incentive Plans Determination of Fair Value, page F -23 6. In view of the materiality of your stock -based compensation over the reported periods , please revise to disclose f air value information of the common stock underlying your stock options, restricted stock awards and common stock repurchases. This information is a significant assumption used to estimate your stock -based compensation pursuant to ASC 718 -10-50-2f. Simil ar disclosure should be made in your Critical Accounting Policies and Estimates - Stock -Based Compensation disclosures on page 57 . Scott Dietzen Pure Storage, Inc. July 1 7, 2015 Page 3 Item 16. Exhibits and Financial Statement Schedules Exhibit 99.1 7. We note that you have filed a consent of Forrester Consulting in response to prior comment 13. We refer to clauses (2), (4) and (6), which appear to disclaim liability for the Forrester Information . Please provide us with analysis supporting your conclusion that such statements are consiste nt with the liability provisions of the Securities Act . See Securities Act Rule 436 and Securities Act Section 11(a)(4). You may contact Melissa Kindelan, Staff Accountant, at (202) 551 -3564 or Craig Wilson, Senior Assistant Chief Accountant, at (202) 551-3226 if you have questions regarding comments on the financial statements and related matters. Please contact Ji Shin, Attorney - Advisor, at (202) 551 - 3579, or in her absence, me at (202) 551 -3735 with any other questions. Sincerely, /s/ Barbara C. Jacobs Barbara C. Jacobs Assistant Director cc: John T. McKenna, Esq. Cooley LLP