Zynga 2015 Annual Report Download - page 43

Table of Contents
do not accurately reflect the actual levels of usage of our games across all platforms and may not correlate to our bookings or revenue from the sale of virtual
goods. There is a possibility that third parties could change their methodologies for calculating these metrics in the future. To the extent that securities analysts or
investors base their views of our business or prospects on such third-party data, the price of our Class A common stock may be volatile and may not reflect the
performance of our business.
Ifsecuritiesorindustryanalystsdonotpublishresearchaboutourbusiness,orpublishnegativereportsaboutourbusiness,oursharepriceandtrading
volumecoulddecline.
The trading market for our Class A common stock, to some extent, depends on the research and reports that securities or industry analysts publish about our
business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or lower their opinion of our shares,
our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose
visibility in the financial markets, which could cause our share price or trading volume to decline.
FuturesalesorpotentialsalesofourClassAcommonstockinthepublicmarketcouldcauseoursharepricetodecline.*
If the existing holders of our Class B common stock, particularly our directors and officers that hold such stock, sell a large number of shares, they could
adversely affect the market price for our Class A common stock. Sales of 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. For example, in connection with the filing of our Registration
Statement on Form S-3 in February 2014, covering the resale of shares issued to the security holders of NaturalMotion prior to our acquisition, we registered
28,178,201 shares of our Class A common stock, which were eligible to be resold immediately thereafter. In addition, in connection with the assumption of certain
outstanding equity awards held by the employees of NaturalMotion prior to the acquisition, we filed a Registration Statement on Form S-8 covering up to
6,850,973 shares of our Class A common stock. These will vest in accordance with the terms of the replacement option awards granted at the time of the
acquisition. As of December 31, 2015, 3,233,693 of these options had vested. We also issued 39.8 million shares of our Class A common stock in connection with
the acquisition of NaturalMotion; certain of the shares issued to employees were subject to time based repurchase options. The repurchase option on 3,848,472
shares was released on or prior to February 11, 2015. In addition, we issued approximately 1.1 million shares of Class A common stock to employees in connection
with our 2014 bonus program. These shares were issued out of the shares reserved under our 2011 Equity Incentive Plan.
Certain holders of our Class B common stock are also entitled to rights with respect to the registration of such shares under the Securities Act of 1933
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, the filing of additional registration statements,
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.
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