Zynga 2012 Annual Report Download - page 40

substantial amounts of our Class A common stock in the public market, or the perception that these sales could
occur, could cause the market price of our Class A common stock to decline. In addition, certain holders of our
Class B common stock will be entitled to rights with respect to the registration of such shares under the
Securities Act pursuant to an investors’ rights agreement. If these holders of our Class B common stock, by
exercising their registration rights, sell a large number of shares, they could adversely affect the market price of
our Class A common stock. If we file a registration statement for the purposes of selling additional shares to raise
capital and are required to include shares held by these holders pursuant to the exercise of their registration
rights, our ability to raise capital may be impaired. Sales of substantial amounts of our Class A common stock in
the public market, following the release of lock-up agreements or otherwise, or the perception that these sales
could occur, could cause the market price of our Class A common stock to decline.
If we are unable to implement and maintain effective internal control over financial reporting in the future,
the accuracy and timeliness of our financial reporting may be adversely affected.
If we are unable to maintain adequate internal controls for financial reporting in the future, or if our auditors
are unable to express an opinion as to the effectiveness of our internal controls as required pursuant to the
Sarbanes-Oxley Act, investor confidence in the accuracy of our financial reports may be impacted or the market
price of our Class A common stock could be negatively impacted.
The requirements of being a public company may strain our resources, divert management’s attention and
affect our ability to attract and retain qualified board members.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the
Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NASDAQ Global
Select Market and other applicable securities rules and regulations. Compliance with these rules and regulations
has increased and will continue to increase our legal and financial compliance costs, make some activities more
difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act
requires, among other things, that we file annual, quarterly and current reports with respect to our business and
operating results.
As a result of disclosure of information in this Annual Report on Form 10-K and in our other public filings
with the SEC as required of a public company, our business and financial condition have become more visible,
which we believe may result in threatened or actual litigation, including by competitors and other third parties. If
such claims are successful, our business and operating results could be harmed, and even if the claims do not
result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve
them, could divert the resources of our management and harm our business and operating results.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash
dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of
our board of directors. Accordingly, investors must rely on sales of their Class A common stock after price
appreciation, which may never occur, as the only way to realize any future gains on their investments.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We own our San Francisco, California corporate headquarters, an office building of approximately 660,000
square feet. We use approximately 480,000 square feet for our operations and lease most of the remainder to
32