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United States securities and exchange commission logo
September 3, 2021
William Brennan
Chief Executive Officer
Credo Technology Group Holding Ltd
1600 Technology Drive
San Jose, CA 95110
Re: Credo Technology
Group Holding Ltd
Draft Registration
Statement on Form S-1
Submitted August
12, 2021
CIK No. 0001807794
Dear Mr. Brennan:
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
Cover Page
1. Please disclose
prominently on the prospectus cover page that you are not a Chinese
operating company but a
Cayman Islands holding company with operations conducted by
your subsidiaries based
in Hong Kong and China and that this structure involves unique
risks to investors.
Provide a cross-reference to your detailed discussion of risks facing the
company and the
offering as a result of this structure.
2. Provide prominent
disclosure about the legal and operational risks associated with being
based in or having the
majority of the company s operations in Hong Kong and China.
Your disclosure should
make clear whether these risks could result in a material change in
your operations and/or
the value of your ordinary shares or could significantly limit or
William Brennan
FirstName LastNameWilliam Brennan
Credo Technology Group Holding Ltd
Comapany 3,
September NameCredo
2021 Technology Group Holding Ltd
September
Page 2 3, 2021 Page 2
FirstName LastName
completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless. Your disclosure
should address how recent statements and regulatory actions by China
s government, such
as those related to the use of variable interest entities and data
security or anti-monopoly
concerns, has or may impact the company s ability to conduct its
business, accept foreign
investments, or list on an U.S. or other foreign exchange. Your
prospectus summary
should address, but not necessarily be limited to, the risks
highlighted on the prospectus
cover page.
3. Clearly disclose how you will refer to the holding company,
subsidiaries, and other
entities when providing the disclosure throughout the document so that
it is clear to
investors which entity the disclosure is referencing and which
subsidiaries or entities are
conducting the business operations. Refrain from using terms such as
we or our when
describing activities or functions of a subsidiary or other entities.
Disclose clearly the
entity (including the domicile) in which investors are purchasing
their interest.
Prospectus Summary, page 1
4. In your summary of risk factors, disclose the risks that your
corporate structure and being
based in or having the majority of the company s operations in Hong
Kong and China
poses to investors. In particular, describe the significant
regulatory, liquidity, and
enforcement risks with cross-references to the more detailed
discussion of these risks in
the prospectus. For example, specifically discuss risks arising from
the legal system in
China, including risks and uncertainties regarding the enforcement of
laws and that rules
and regulations in China can change quickly with little advance
notice; and the risk that
the Chinese government may intervene or influence your operations at
any time, or may
exert more control over offerings conducted overseas and/or foreign
investment in China-
based issuers, which could result in a material change in your
operations and/or the value
of your ordinary shares. Acknowledge any risks that any actions by the
Chinese
government to exert more oversight and control over offerings that are
conducted overseas
and/or foreign investment in China-based issuers could significantly
limit or completely
hinder your ability to offer or continue to offer securities to
investors and cause the value
of such securities to significantly decline or be worthless.
5. Disclose each permission that you or your subsidiaries are required to
obtain from Chinese
authorities to operate and issue these securities to foreign
investors. State whether you or
your subsidiaries are covered by permissions requirements from the
China Securities
Regulatory Commission (CSRC), the Cyberspace Administration of China
(CAC), or any
other entity that is required to approve your or your subsidiaries'
operations, and state
affirmatively whether you have received all requisite permissions and
whether any
permissions have been denied.
6. Provide a clear description of how cash is transferred through your
organization. Disclose
your intentions to distribute earnings or settle amounts owed under
your operating
structure. Quantify any cash flows and transfers of other assets by
type that have occurred
William Brennan
FirstName LastNameWilliam Brennan
Credo Technology Group Holding Ltd
Comapany 3,
September NameCredo
2021 Technology Group Holding Ltd
September
Page 3 3, 2021 Page 3
FirstName LastName
between the holding company and its subsidiaries and direction of
transfer. Quantify any
dividends or distributions that a subsidiary has made to the holding
company and which
entity made such transfer, and their tax consequences. Similarly
quantify dividends or
distributions made to U.S. investors, the source, and their tax
consequences. Describe any
restrictions on foreign exchange and your ability to transfer cash
between entities, across
borders, and to U.S. investors. Describe any restrictions and
limitations on your ability to
distribute earnings from your subsidiaries to the parent company and
U.S. investors as
well as the ability to settle amounts owed.
Risk Factors, page 14
7. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to separately highlight the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your common stock. Also,
given recent
statements by the Chinese government indicating an intent to exert
more oversight and
control over offerings that are conducted overseas and/or foreign
investment in China-
based issuers, acknowledge the risk that any such action could
significantly limit or
completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless.
8. In light of recent events indicating greater oversight by the CAC over
data security,
particularly for companies seeking to list on a foreign exchange,
please revise your
disclosure to explain how this oversight impacts your business and
your offering and to
what extent you believe that you are compliant with the regulations or
policies that have
been issued by the CAC to date.
Business, page 80
9. The description of your business is highly technical and may be
difficult for investors who
are not experts in your industry to understand. Please revise your
disclosure here and in
the Prospectus Summary to ensure it is clear, concise, and
understandable in accordance
with Rule 421 of Regulation C, including the following:
Eliminate or limit business and technical jargon; explain
remaining terms and phrases
which are technical in nature or whose meaning is not readily
apparent;
Reduce your use of acronyms; if there are some acronyms you
cannot eliminate,
consider using a shortened name for the description instead of an
acronym; and
Consider adding pictures, graphs, or other design elements to
depict your technology.
10. We note contingent language on page 35 that states "to the extent"
your products are
subject to regulation, their export "may be limited", "may require
export authorizations",
or may be subject to sale/supply prohibitions. Please revise to
clarify the actual need for
government approval and effects of governmental regulations on your
business. See
William Brennan
FirstName LastNameWilliam Brennan
Credo Technology Group Holding Ltd
Comapany 3,
September NameCredo
2021 Technology Group Holding Ltd
September
Page 4 3, 2021 Page 4
FirstName LastName
Item 101(h) of Regulation S-K. Please include further information
regarding your
voluntary self-disclosure concerning apparent export violations,
describing the process,
potential outcomes, and any material risks that may arise.
Certain Relationships and Related Party Transactions, page 102
11. We note the amended and restated members agreement provides certain
holders pro rata
participation rights in sales by you of new securities and information
rights. Please clarify
whether these participation rights apply to shares being sold in your
initial offering and, if
so, provide additional information regarding such rights here or in
the Underwriting
section. Please also clarify what is meant by the reference to
"information rights."
Principal Shareholders, page 105
12. We note that the information in the beneficial ownership table is
current as of April 30,
2021. Please update the information as of the most recent practicable
date. See Item 403
of Regulation S-K.
Part II
Item 15. Recent Sales of Unregistered Securities, page II-2
13. We note the issuance and sale of your convertible preferred shares to
recipients who had
"adequate access, through their relationships with us, to information
about us." Please
name the persons or identify the class of persons to whom such
securities were sold. See
Item 701 of Regulation S-K.
Item 16. Exhibit Index, page II-4
14. We note references to Proprietary or Confidential Information and
Inventions Agreements
signed with your named executive officers. Please file a form of such
agreement as an
exhibit pursuant to Item 601(b)(10). In addition, please revise the
footnote to Exhibit 10.9
to indicate that information has been redacted in accordance with Item
601(b)(10)(iv) of
Regulation S-K.
Signatures, page II-5
15. Please confirm that William Brennan, the signatory on behalf of the
registrant, is the
registrant's duly authorized representative in the United States. See
Securities Act Section
6(a) and Instruction 1 under Signatures on Form S-1.
General
16. Please revise the prospectus cover page to identify the nature of the
underwriting
arrangements. See Item 501(b)(8) of Regulation S-K. We note that the
initial public
offering price will be determined through negotiations with the
underwriters; please also
describe the factors considered in determining the offering price. See
Item 505 of
Regulation S-K.
William Brennan
Credo Technology Group Holding Ltd
September 3, 2021
Page 5
You may contact Effie Simpson at 202-551-3346 or Martin James at
202-551-3671 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Jennifer Angelini at 202-551-3047 or Perry Hindin at 202-551-3444 with
any other
questions.
Sincerely,
FirstName LastNameWilliam Brennan
Division of Corporation
Finance
Comapany NameCredo Technology Group Holding Ltd
Office of Manufacturing
September 3, 2021 Page 5
cc: Alan Denenberg
FirstName LastName