Enom 2015 Annual Report Download - page 31

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We are required to make an assessment of the effectiveness of our internal controls over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act of 2002. We are also required to obtain an opinion on the
effectiveness of our internal controls over financial reporting from our independent registered public accounting firm.
Section 404 requires us to perform system and process evaluation and testing of our internal controls over financial
reporting to allow management and our independent registered public accounting firm to report on the effectiveness of
our internal controls over financial reporting for each fiscal year. Our testing, or the subsequent testing by our
independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting
that are deemed to be material weaknesses. If we are unable to comply with the requirements of Section 404,
management may not be able to assess whether our internal controls over financial reporting are effective, which may
subject us to adverse regulatory consequences and could result in a negative reaction in the financial markets due to a
loss of confidence in the reliability of our financial statements. In addition, if we fail to maintain effective controls and
procedures, we may be unable to provide the required financial information in a timely and reliable manner or otherwise
comply with the standards applicable to us as a public company. Any failure by us to provide the required financial
information in a timely and reliable manner could materially and adversely impact our financial condition and the
trading price of our securities. In addition, we may incur additional expenses and commitment of management’s time in
connection with further assessments of our compliance with the requirements of Section 404, which could materially
increase our operating expenses and adversely impact our results of operations.
If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price and
trading volume could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry
analysts publish about us or our business. If one or more of the analysts who cover us downgrade our stock or publish
inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these
analysts ceases to cover us or fails to publish reports on us regularly, demand for our stock could decrease, which might
cause our stock price and trading volume to decline.
We do not anticipate paying cash dividends and, accordingly, stockholders must rely on stock appreciation for any
return on their investment.
We have never declared or paid cash dividends on our common stock and we do not anticipate paying cash
dividends in the future. As a result, only appreciation of the price of our common stock, which may never occur, will
provide a return to stockholders. Investors seeking cash dividends should not invest in our common stock.
Certain provisions in our charter documents and Delaware law could discourage takeover attempts and lead to
management entrenchment.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that
could have the effect of delaying or preventing changes in control or changes in our management without the consent of
our board of directors, including, among other things:
x a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to
change the membership of a majority of our board of directors;
x no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect
director candidates;
x the ability of our board of directors to determine to issue shares of preferred stock and to determine the price
and other terms of those shares, including preferences and voting rights, without stockholder approval, which
could be used to significantly dilute the ownership of a hostile acquiror;
x the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our
board of directors or the resignation, death or removal of a director, which prevents stockholders from being
able to fill vacancies on our board of directors;