Chegg 2014 Annual Report Download - page 115

Table of Contents
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Note 8. Balance Sheet Details
Accrued liabilities consist of the following (in thousands):
December 31,
2014 2013
Accrued book purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,812 $ 1,905
Accrued shipping for cycle returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539 2,929
Chegg credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,264 3,124
Refund reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,174 330
Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,851 3,067
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,543 9,915
$ 31,183 $ 21,270
Other liabilities consist of the following (in thousands):
December 31,
2014 2013
Put option liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 1,521
Deferred rent, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,233 1,803
Long term tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,088 1,281
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044 374
$ 4,365 $ 4,979
Note 9. Debt Obligations
In May 2012, we entered into a term loan facility with the aggregate principal of $20.0 million, (“the Term Loan”),
with interest payable on a monthly basis at the rate of 11.5%. In connection with the Term Loan, we issued preferred stock
warrants to the lender. In August 2013, we repaid the loan in full, including the outstanding principal balance of $20.0 million
and an end-of-term fee of $850,000.
In August 2013, we entered into a revolving credit facility with an aggregate principal amount of $50.0 million (the
Revolving Credit Facility). On June 30, 2014 we amended the Revolving Credit Facility to reduce the aggregate principal
amount to $40.0 million with an accordion feature subject to certain financial criteria that would allow us to draw down to
$75.0 million in total. The Revolving Credit Facility carries, at our election, a base interest rate of the greater of the Federal
Funds Rate plus 0.5% or one-month LIBOR plus 1% or a LIBOR based interest rate plus additional interest of up to 4.5%
depending on our leverage ratio. The Revolving Credit Facility will expire on August 12, 2016. The Revolving Credit Facility
requires us to repay the outstanding balance at expiration, or to prepay the outstanding balance, if certain reporting and
financial covenants are not maintained. These financial covenants are as follows: (1) maintain specified quarterly levels of
consolidated EBITDA, which is defined as net income (loss) before tax plus interest expense, provision for (benefit from)
income taxes, depreciation and amortization expense, non-cash share-based compensation expense and costs and expenses not
to exceed $2.0 million in closing fees related to the revolving credit facility; and (2) maintain a leverage ratio greater than 1.5
to 1.0 as of the end of each quarter, based on the ratio of the consolidated outstanding debt balance to consolidated EBITDA for
the period of the four fiscal quarters most recently ended. As of December 31, 2014, we were in compliance with these
financial covenants. In August 2013, we drew down $21.0 million in proceeds from the Revolving Credit Facility and with
these proceeds we repaid in full our Term Loan outstanding principal balance of $20.0 million. In October 2013, we drew down
an additional $10.0 million in proceeds from the Revolving Credit Facility. In November 2013, we repaid in full our $31.0
million outstanding balance of the Revolving Credit Facility.
Note 10. Stock Warrants
In connection with our IPO in November 2013, our previously outstanding convertible preferred stock warrants were
converted into 1,118,282 common stock warrants at a weighted average exercise price of $5.16 per share.