Chegg 2014 Annual Report Download - page 71

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against us could result in substantial costs and divert our management’s attention from other business concerns, which could
seriously harm our business.
If securities or industry analysts do not publish research reports about our business or publish inaccurate or unfavorable
research about our business, our stock price 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 common stock or publish
inaccurate or unfavorable research about our business, our common stock 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.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings
to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable
future. As a result, our stockholders may only receive a return on their investment in our common stock if the market price of
our common stock increases. In addition, our credit facility contains restrictions on our ability to pay dividends.
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to
“emerging growth companies” will make our common stock less attractive to investors.
We are an “emerging growth company,” as defined under the JOBS Act. For so long as we are an “emerging growth
company,” we may take advantage of certain exemptions from reporting requirements that are applicable to other public
companies that are not “emerging growth companies” including, but not limited to, compliance with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in
our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on
executive compensation and stockholder approval of any golden parachute payments not previously approved.
We could be an “emerging growth company” for up to five years, although we may lose such status earlier, depending
on the occurrence of certain events. We will remain an “emerging growth company” until the earliest to occur of (i) the last day
of the year (a) following the fifth anniversary of this offering, (b) in which we have total annual gross revenue of at least $1.0
billion or (c) in which we are deemed to be a “large accelerated filer” under the Exchange Act, which means that the market
value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, and (ii) the date on which
we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
We cannot predict if investors will find our common stock less attractive or our company less comparable to certain
other public companies because we will rely on these exemptions. If some investors find our common stock less attractive as a
result, there may be a less active trading market for our common stock and our stock price may be more volatile.
Under the JOBS Act, “emerging growth companies” can delay adopting new or revised accounting standards issued
subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have
irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and will be subject to the
same new or revised accounting standards as other public companies that are not “emerging growth companies.”
Delaware law and provisions in our restated certificate of incorporation and restated bylaws that went into effect at the
closing of our IPO could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our
common stock.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may
discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested
stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be
beneficial to our existing stockholders. In addition, our restated certificate of incorporation and restated bylaws contain
provisions that may make the acquisition of our company more difficult, including the following:
• our board of directors is classified into three classes of directors with staggered three-year terms and directors
can only be removed from office for cause and by the approval of the holders of at least two-thirds of our
outstanding common stock;