<SEC-DOCUMENT>0001104659-17-033750.txt : 20170705
<SEC-HEADER>0001104659-17-033750.hdr.sgml : 20170705
<ACCEPTANCE-DATETIME>20170518150231
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001104659-17-033750
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20170518

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SHOTSPOTTER, INC
		CENTRAL INDEX KEY:			0001351636
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		7979 GATEWAY BLVD., STE. 210
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560
		BUSINESS PHONE:		(510) 794-3100

	MAIL ADDRESS:	
		STREET 1:		7979 GATEWAY BLVD., STE. 210
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SHOTSPOTTER INC
		DATE OF NAME CHANGE:	20110517

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Shotspotter Inc
		DATE OF NAME CHANGE:	20060131
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<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jodie M. Bourdet</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">+1 415 693 2054</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">jbourdet@cooley.com</font></p>
<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">VIA EDGAR</font></u></b></p>
<p style="margin:0in 0in .0001pt 5.4pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;18, 2017</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">U.S. Securities and Exchange Commission</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Division of Corporate Finance</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">100 F Street, N.E.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Washington D.C. 20549</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attn:&#160; Jan Woo, Legal Branch Chief</font></p>
<p style="margin:0in 0in .0001pt;text-indent:27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matthew Derby, Staff Attorney</font></p>
<p style="margin:0in 0in .0001pt;text-indent:27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Christine Dietz, Assistant Chief Accountant</font></p>
<p style="margin:0in 0in .0001pt;text-indent:27.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Frank Knapp, Staff Accountant</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 22.3pt;text-indent:-22.3pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RE:</font></b><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b>ShotSpotter,&nbsp;Inc.</b></p>
<p style="margin:0in 0in .0001pt;text-indent:22.3pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Registration Statement on Form&nbsp;S-1</font></b></p>
<p style="margin:0in 0in .0001pt;text-indent:22.3pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Filed on May&nbsp;2, 2017</font></b></p>
<p style="margin:0in 0in .0001pt;text-indent:22.3pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SEC File No.&nbsp;333-217603</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ladies and Gentlemen:</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On behalf of ShotSpotter,&nbsp;Inc. (the &#147;<b><i style="font-weight:bold;">Company</i></b>&#148;), we are submitting this letter in response to comments received from the staff (the &#147;<b><i style="font-weight:bold;">Staff</i></b>&#148;) of the Securities and Exchange Commission (the &#147;<b><i style="font-weight:bold;">Commission</i></b>&#148;) by telephone on May&nbsp;18, 2017, regarding the registration statement referenced above (the &#147;<b><i style="font-weight:bold;">Registration Statement</i></b>&#148;).</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For convenience, we reference the Staff&#146;s prior comment 8:</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">We note that your future growth depends on acquiring new customers, increasing coverage area expansion and renewing existing customer relationships. Based on your discussion of the revenue retention rate, it is unclear what percentage of your existing customers renews their subscription. It also does not reflect the impact on your business from the acquisition new customers. Consider disclosing revenue information and trends on a new versus existing customer basis and providing historical renewal rates. Refer to Section&nbsp;III.B of SEC Release 33-8350.</font></i></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cooley LLP&#160;&#160; 101 California Street&#160;&#160; 5th Floor&#160;&#160; San Francisco, CA&#160;&#160; 94111-5800<br> t: (415) 693-2000&#160; f: (415) 693-2222&#160; cooley.com</font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company supplements its prior response to comment 8 by advising the Staff that the Company determined that revenue retention rate was the best metric to measure the current and future performance of its business as it relates to existing customers.&#160; Individual customers generate different amounts of revenue depending on the price they pay, the square miles covered and whether there is an increase or decrease in the overall coverage area from period to period.&#160; A loss of a customer may have no effect on the revenue retention rate. Conversely, even if customer retention is stable, our revenue retention rate can change dramatically.&#160; The Company believes that revenue retention rate captures the positive and negative impact of changes in customer retention, price and coverage area in the way that is most meaningful to investors.&#160; However, in response to the Staff&#146;s comment, the Company proposes to revise its disclosure as provided below to clarify that revenue retention rate does not include revenue from customers added during the period (i.e., new customers) and to better explain the Company&#146;s low churn (new text shown as underlined):</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Prospectus Summary &#151; Key Business Metrics, footnote (1)&nbsp;(page&nbsp;13):</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Revenue retention rate. We calculate our revenue retention rate for a year by dividing the (a)&nbsp;total revenues for such year from those customers who were customers during the corresponding prior year by (b)&nbsp;the total revenues from all customers in the corresponding prior year. For the purposes of calculating our revenue retention rate, we count as customers all entities with which we had contracts in the applicable period.&#160; <u>Revenue retention rate for any given period does not include revenue attributable to customers first acquired during such period.&#160; </u>We focus on our revenue retention rate because we believe that this metric provides insight into revenue related to and retention of existing customers. If our revenue retention rate for a year exceeds 100% as it did in the years presented above, this indicates a low churn and means that the revenues retained during the year, including from customer expansions, more than offset the revenues that we lost from customers that did not renew their contracts during the year.&#160; <u>As further evidence of our low churn, since transitioning our public safety business to the ShotSpotter Flex model in 2011, we have added 46 new ShotSpotter Flex customers, but only two such customers have terminated service.</u>&#160; We measure revenue retention rate on an annual basis.&#148;</p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Management&#146;s Discussion and Analysis &#151; Key Business Metrics &#151; Revenue Retention Rate (page&nbsp;53)</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;We calculate our revenue retention rate for a period by dividing the (a)&nbsp;total revenues for such year from those customers who were customers during the corresponding prior year by (b)&nbsp;the total revenues from all customers in the corresponding prior year. For the purposes of calculating our revenue retention rate, we count as customers all entities with which we had contracts in the applicable year.&#160; <u>Revenue retention rate for any given period does not include revenue attributable to customers first acquired during such period</u>.&#160; We focus on our revenue retention rate because we believe that this metric provides insight into revenue related to and retention of existing customers. If our revenue retention rate for a year exceeds 100%, as it did in the years presented above, this indicates a low churn and means that the revenues retained during the year, including from customer expansions, more than offset the revenues that we lost from customers that did not renew their contracts during the year.&#160; <u>As further evidence of our low churn, since transitioning our public safety business to the ShotSpotter Flex model in 2011, we have added 46 new ShotSpotter Flex customers, but only two such customers have terminated service</u>.&#160; We measure revenue retention rate on an annual basis.</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cooley LLP&#160;&#160; 101 California Street&#160;&#160; 5th Floor&#160;&#160; San Francisco, CA&#160;&#160; 94111-5800<br> t: (415) 693-2000&#160; f: (415) 693-2222&#160; cooley.com</font></p>
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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">2<a name="PB_2_231723_9394"></a></p>
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<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Business &#151; Our Customers (page&nbsp;85-86):</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;As of March&nbsp;31, 2017, we had active deployments of our solutions in more than 90 locations in the United States, Puerto Rico, the U.S. Virgin Islands and South Africa, including 74 public safety customers in 89 cities and municipalities across the United States and in four of the ten largest cities.&#160; Our largest customers of our public safety solution, measured by covered square miles, included: New York City, New York; Birmingham, Alabama; Chicago,&nbsp;Illinois; Washington, D.C.; Oakland and San Francisco, California; and the Puerto Rico Housing Administration. Of our 74 public safety customers, over 39% have expanded their coverage areas from their original deployment areas by an average of seven square miles, and our revenue retention rate has been over 100% for each of 2016, 2015 and 2014. <u>Since transitioning our public safety business to the ShotSpotter Flex model in 2011, we have added 46 new ShotSpotter Flex customers, but only two such customers have terminated service</u>.&#160; Our public safety solution covered approximately 450 square miles worldwide as of March&nbsp;31, 2017, up from approximately 230 square miles as of the end of 2013. We also had six security solutions customers covering seven higher education campuses, of which five had their solutions fully deployed as of March&nbsp;31, 2017.&#148;</font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">******</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We greatly appreciate the Staff&#146;s assistance in clearing these comments as quickly as possible.&#160; Should you have any additional questions or comments concerning the Registration Statement, Amendment No.&nbsp;1 or this response letter, please contact the undersigned at (415) 693-2054 or Rob Phillips at (415) 693-2020.</font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sincerely,</font></p>    </td>
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<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ </font>Jodie M. Bourdet</p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jodie   M. Bourdet</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">cc:</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Ralph Clark, Chief Executive Officer, ShotSpotter,&nbsp;Inc.</p>
<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Alan Stewart, Chief Financial Officer, ShotSpotter,&nbsp;Inc.</font></p>
<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sonya Strickler, Vice President of Finance, ShotSpotter,&nbsp;Inc.</font></p>
<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Rob Phillips, Cooley LLP</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cooley LLP&#160;&#160; 101 California Street&#160;&#160; 5th Floor&#160;&#160; San Francisco, CA&#160;&#160; 94111-5800<br> t: (415) 693-2000&#160; f: (415) 693-2222&#160; cooley.com</font></p>
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