LeapFrog 2012 Annual Report Download - page 25

Download and view the complete annual report

Please find page 25 of the 2012 LeapFrog annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 153

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153

• the composition of our board of directors and, through it, any determination with respect to our
business direction and policies, including the appointment and removal of officers;
• any determinations with respect to mergers, other business combinations, or changes in control;
• our acquisition or disposition of assets; and
• our financing activities.
Mr. Ellison, Messrs. Michael and Lowell Milken and Ms. Milken could have interests that diverge from those
of our other stockholders. This significant influence by a few stockholders could depress the market price of
our Class A common stock; deter, delay or prevent a change in control of LeapFrog; or affect other significant
corporate transactions that otherwise might be viewed as beneficial for other stockholders.
Our stock price has been volatile over the past several years and could decline in the future, resulting in
losses for our investors and harming the employee-retention and recruiting value of our equity
compensation.
All the factors discussed in this section or any other material announcements could affect our stock price.
Speculation in the media and analyst communities, changes in recommendations or earnings estimates by
financial analysts, changes in investors’ or analysts’ valuation measures for our stock and market trends
unrelated to our stock can cause the price of our stock to change. A significant drop in the price of our stock
could also expose us to the risk of securities class action lawsuits, which could result in substantial costs and
divert management’s attention and resources, adversely affecting our business.
Our future success depends partly on the continued contribution of our key executives and technical, sales,
marketing, manufacturing and administrative personnel. Part of our compensation package includes stock
and/or stock options. To the extent our stock performs poorly, it may adversely affect our ability to retain or
attract key employees, potentially resulting in lost institutional knowledge and key talent. Changes in
compensation packages or costs could impact our profitability and/or our ability to attract and retain sufficient
qualified personnel.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The table below lists our current significant properties. In addition, we have leased properties for
administration, sales and operations in Canada, England, France, Mexico and China, which are primarily used
by our International Segment.
Location Use Segment Condition Type of Possession
Fontana, California Distribution center All Satisfactory Lease
Emeryville, California Headquarters and operations All Satisfactory Lease
ITEM 3. LEGAL PROCEEDINGS
Refer to information under the heading ‘‘Legal Proceedings’’ in Note 19 — ‘‘Commitments and
Contingencies’’ in our Consolidated Financial Statements included in this Annual Report on Form 10-K.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
17