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CORRESP
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filename1.htm

CORRESP

 650 Town Center Drive, 20th Floor

Costa Mesa, California 92626-1925

 Tel: +1.714.540.1235 Fax:
+1.714.755.8290

 www.lw.com

FIRM / AFFILIATE OFFICES

FOIA CONFIDENTIAL TREATMENT REQUEST UNDER 17 C.F.R. §200.83

Beijing

Moscow

Boston

Munich

Brussels

New York

Century City

Orange County

Chicago

Paris

Dubai

Riyadh

Düsseldorf

San Diego

Frankfurt

San Francisco

Hamburg

Seoul

Hong Kong

Shanghai

Houston

Silicon Valley

London

Singapore

Los Angeles

Tokyo

Madrid

Washington, D.C.

Milan

 The entity requesting confidential treatment is:

Inari Medical, Inc.

 9 Parker, Suite 100

Irvine, CA 92618

 Certain confidential information in this
letter has been omitted and provided separately to the Securities and Exchange Commission. Confidential treatment has been requested by Inari Medical, Inc. with respect to the omitted portions, which are identified in this letter by the mark
“[***].”

 March 4, 2020

 VIA EDGAR
AND COURIER DELIVERY

 United States Securities and Exchange Commission

Division of Corporation Finance

 100 F Street, N.E.

Washington, DC 20549-1090

Attention:

Chris Edwards

Irene Paik

Jeanne Bennett

Kevin Kuhar

Re: Inari Medical, Inc. | Anticipated Price Range and Share-Based Compensation

Registration Statement on Form S-1 (File No. 333-236568)

 Ladies and Gentlemen:

This supplemental letter is being furnished on behalf of Inari Medical, Inc. (the “Company”) in response to comments
from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) received by telephone on March 2, 2020, and in connection with the review by the Commission of the
above-mentioned Registration Statement on Form S-1 (the “Registration Statement”). The supplemental response set forth below is based upon information provided to Latham &
Watkins LLP by the Company.

 Because of the commercially sensitive nature of the information discussed in this letter, this submission is
accompanied by the Company’s request for confidential treatment of selected portions of this letter pursuant to Rule 83 of the Commission’s Rules on Information Rights Requests, 17 C.F.R. §200.83. A redacted version of this letter
will be filed with the Commission on EDGAR, omitting the confidential information.

 For the convenience of the Staff, we are providing to
the Staff copies of this letter by hand delivery.

 CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED BY

 INARI MEDICAL, INC.

 Securities and Exchange Commission

 Page
 2

 Estimated Preliminary IPO Price Range

The Company advises the Staff that, while not yet reflected in the Registration Statement, based on discussions with the Company’s board
of directors (the “Board”) and reflecting input from the lead underwriters (the “Underwriters”) of the Company’s proposed initial public offering of its common stock (the
“IPO”), if the Company were to commence marketing of the transaction today, the Company presently anticipates that the estimated price range would be approximately $[***] per share to $[***] per share (the
“Preliminary IPO Price Range”), with a midpoint of approximately $[***] per share (the “Preliminary Assumed IPO Price”). The share numbers, Preliminary IPO Price Range, Preliminary Assumed IPO Price,
exercise prices and fair values herein do not take into account a 1-for-1.19 reverse stock split that the Company intends to implement in connection with the IPO.

For clarity, the Company advises the Staff that, given the recent volatility of the public trading markets and the uncertainty of the timing
of the offering, the Company and the Underwriters have not yet finally agreed to a price range for the offering. The Company advises the Staff that the final price range to be included in a pre-effective
amendment to the Registration Statement, after giving effect to an appropriate stock split, will include a price range of no more than $2.00 or 20% of the high end of the range, unless otherwise approved by the Staff.

Summary of Recent Option Grants and Common Stock Valuation

As there has been no public market for the common stock of the Company to date, the estimated fair value of the Company’s common stock has
been determined by the Company’s Board as of the date of each option grant, with input from management, consideration of third-party valuations of the common stock and the Board’s assessment of additional objective and subjective factors
that it believed were relevant at that time and which may have changed from the date of the most recent third-party valuation through the date of the grant, including the factors disclosed on page 96 of the Registration Statement.

The independent third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public
Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation (the “Practice Guide”). The Practice Guide identifies various available methods for allocating enterprise value
across classes and series of capital stock to determine the estimated fair value of common stock at each valuation date. The valuation methods considered for allocating the enterprise value across the Company’s common stock to determine the
fair value of the Company’s common stock at each valuation date included the following:

•

 Option Pricing Method (the “OPM”). The OPM allocates value for each equity class by
creating a series of call options on the equity value, with exercise prices based on the liquidation preferences and conversion terms of each equity class.

•

 Probability-Weighted Expected Return Method (the “PWERM”). The PWERM is a scenario-based
analysis that estimates the value per share based on the probability-weighted present value of expected future equity values for the common stock, under various possible future liquidity event scenarios, in light of the rights and preferences of
each class of stock, discounted for a lack of marketability.

•

 Hybrid Method (the “Hybrid Method”). The Hybrid Method combines both OPM and PWERM.
Weighting allocations are assigned to the OPM and PWERM methods in factoring in possible future equity values for the common stock, under various possible future liquidity event scenarios.

Through December 2018, the Company obtained these independent third-party valuations at least annually and in connection with the occurrence
of significant events, such as an equity financing. In March 2019, the Company decided to increase the frequency of obtaining independent third-party valuations such that the valuations were determined at least quarterly, prior to any option grant
dates, in order to capture the effect on the fair value of the Company’s common stock of the significant progress of the Company in relation to its commercial acceleration and its clinical and product development efforts. In connection with the
IPO, the Company determined to obtain such valuations at least monthly, starting in November 2019.

 CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED BY

 INARI MEDICAL, INC.

 Securities and Exchange Commission

 Page
 3

 The independent third-party valuations that were used, in part, by the Board to determine the
fair value of the Company’s common stock as of December 31, 2018, April 30, 2019 and June 30, 2019 each utilized the OPM method, primarily due to the expected term to liquidity and the lack of precise information regarding the
timing and likelihood of potential liquidity events. The Company’s most recent third-party valuations that were used, in part, by the Board to determine the fair value of the Company’s common stock as of September 30, 2019,
November 30, 2019, December 31, 2019 and January 31, 2020 each utilized the Hybrid Method in order to capture the probability of potential liquidity events. These most recent third-party valuations considered a combination of the
following four future-event scenarios: a 2020 IPO scenario, a 2021 IPO scenario, a sale scenario and a stay private scenario. In each of the valuations noted in this paragraph, the Company then applied a discount for lack of marketability
(“DLOM”) in order to reflect the lack of a recognized market for the Company’s common stock and the fact that a non-controlling equity interest may not be readily transferable. In
each case, the Company estimated the appropriate DLOM based on, among others, the nature of the Company’s operations and related risks, and the severity of the restrictions on liquidity of the Company’s common stock.

In light of the proposed IPO, and in connection with the preparation of the financial statements included in the Registration Statement, the
Company retrospectively reassessed the fair value of its common stock for accounting and financial purposes only. As described in more detail under the heading “Fair Value Reassessment,” for purposes of this reassessment, the Company
assumed that the fair value of its common stock increased on a straight-line basis between third-party valuations. The Company believes that a straight-line interpolation is appropriate as no single event caused the valuation of its common stock to
fluctuate.

 The following table summarizes by month of grant date the number of shares of common stock underlying stock options granted
during the previous fifteen months, the associated per share exercise price, the estimated fair value per share at the time of grant and the reassessed fair value per share of the Company’s common stock on the grant date that was used in
preparing the financial statements included in the Registration Statement.

 Grant Date

Number of
Shares
Underlying
Stock Options
Granted

Exercise Price

Fair Value Per
Share at Grant
Date(1)

Interpolated Fair
Value Per Share(2)

 March 12, 2019

[***
]

$
[***
]

$
[***
]

$
[***
]

 April 23, 2019

[***
]

$
[***
]

$
[***
]

$
[***
]

 June 26, 2019

[***
]

$
[***
]

$
[***
]

$
[***
]

 September 18, 2019

[***
]

$
[***
]

$
[***
]

$
[***
]

 December 17, 2019

[***
]

$
[***
]

$
[***
]

$
[***
]

 January 17, 2020

[***
]

$
[***
]

$
[***
]

$
[***
]

 February 14, 2020

[***
]

$
[***
]

$
[***
]

—
(3)

1.
 At the time of this option grant, the Board determined the fair value of the Company’s common stock, in
part, after taking into account the Company’s most recently available independent third-party valuation of its common stock as of such grant date, as well as the other objective and subjective criteria identified on page 96 of the Registration
Statement.

2.
 Solely for financial reporting purposes, the fair value of the Company’s common stock at the date of this
grant was adjusted in connection with a retrospective fair value assessment using hindsight as further described under the subject entitled “Fair Value Reassessment” below.

3.
 With respect to the option grants in February 2020, for financial reporting purposes, the Company expects to,
using hindsight, interpolate the fair value on a straight-line basis from the January Valuation to the valuation of the IPO.

The Board’s determination of the fair value at the time of each grant above was based, in part, on the results of a third-party valuation
of the Company’s common stock performed on the dates set out below.

 Valuation Date (As of)

Fair Value Per Share
of Common Stock

 December 31, 2018

$
[***
]

 April 30, 2019

$
[***
]

 June 30, 2019

$
[***
]

 September 30, 2019

$
[***
]

 November 30, 2019

$
[***
]

 December 31, 2019

$
[***
]

 January 31, 2020

$
[***
]

 CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED BY

 INARI MEDICAL, INC.

 Securities and Exchange Commission

 Page
 4

 December 31, 2018 Valuation and March 12, 2019 and April 23, 2019 Grants

 The Company obtained an independent third-party valuation report of the Company’s common stock as of December 31, 2018
(the “December 2018 Valuation”).

 The December 2018 Valuation used the OPM method due to the expected term to
liquidity and the lack of precise information regarding the timing and likelihood of potential exit events. Under the OPM, the Company applied the public company and transaction market methods to determine the enterprise value. The public company
method, utilizes data from publicly traded companies with financial and operating characteristics similar to the Company to calculate multiples for comparable data. The transaction method determines valuation multiples from sales of companies with
financial and operating characteristics similar to the Company. At the time of the valuation, the Company was in its early stage of development, and its products had concluded clinical trials and received FDA 510(k) clearance. However, the Company
did not have a sales history and there was significant uncertainty in the Company’s ability to forecast future results. The Company identified the following comparable companies based on operational similarities and other qualitative factors:
Abbott Laboratories, AngioDynamics, Inc, Baxter International Inc., Boston Scientific Corporation, Johnson & Johnson, LeMaitre Vascular, Inc., Medtronic plc, Penumbra, Inc. and Becton and Dickinson and Company.

Within the OPM, the independent third-party valuation used an estimated selected volatility of [***]%, an expected time to liquidity
event of [***] years and applied a DLOM of [***]%, which was based on the application of a protective put option analysis. Based on the comparable data, the December 2018 Valuation determined that the equity value of the Company was
$[***] million as of December 31, 2018, which resulted in an estimated fair value per share of common stock of $[***].

At the time of each of the equity grants on March 12, 2019 and April 23, 2019, the Board considered the results of the December 2018
Valuation, as well as the other objective and subjective criteria identified on page 96 of the Registration Statement, and determined that the fair value of the Company’s common stock was $[***] per share on each of those dates.

April 30, 2019 Valuation and June 26, 2019 Grants

In light of the Company’s commercial progress, the Board determined to increase the frequency of its third-party valuations and obtained
an independent third-party valuation report of the Company’s common stock as of April 30, 2019 (the “April Valuation”). The methodology for the April Valuation was the same as the methodology used in connection with
the December 2018 Valuation. Please see the paragraphs above for a discussion of this valuation methodology.

 Within the OPM, the
independent third-party valuation used an estimated selected volatility of [***]%, an expected time to liquidity event of [***] years and applied a DLOM of [***]%, which was based on the application of a protective put option
analysis. Based on the comparable data, the April Valuation determined that the equity value of the Company was $[***] million as of April 30, 2019, which resulted in an estimated fair value per share of common stock of $[***].

 For purposes of determining the fair value of the Company’s common stock for the equity grants made on June 26, 2019, the Board
considered the results of the April Valuation (which was then its most recent third-party valuation) together with the objective and subjective factors described on page 96 of the Registration Statement. As a result of this analysis, the Board
determined that the fair value of the Company’s common stock was $[***] per share as of June 26, 2019.

 CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED BY

 INARI MEDICAL, INC.

 Securities and Exchange Commission

 Page
 5

 June 30, 2019 Valuation and September 18, 2019 Grants

The Board obtained another independent third-party valuation report of the Company’s common stock as of June 30, 2019 (the
“June Valuation”). The methodology for the June Valuation was the same methodology used in connection with the December 2018 Valuation and the April Valuation. Please see the description of the December 2018 Valuation above
for a discussion of