Chegg 2014 Annual Report Download - page 80
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Table of Contents
42
marketing expenses also include lead generation services and sales commissions for our enrollment marketing services and
brand advertising.
General and Administrative
Our general and administrative expenses consist of salaries, benefits and share-based compensation expense for
certain executives as well as our finance, legal, human resources and other administrative employees. In addition, general and
administrative expenses include outside consulting, legal and accounting services, provision for doubtful accounts and
allocated information technology and facilities costs. We expect to incur additional costs related to operating as a public
company including increased audit, legal, regulatory and other related fees.
Loss (Gain) on Liquidation of Textbooks
Loss (gain) on liquidation of textbooks consists of proceeds we receive from the sale of previously rented print
textbooks, through our website or to wholesalers and other channels, offset by the net book value of such textbooks. Our loss
(gain) on liquidation of textbooks is driven by several factors including age of the books liquidated, the volume of books
liquidated at a given point in time and the channel through which we liquidate. When the proceeds received exceed the net
book value of the textbooks liquidated we record a gain on liquidation of textbooks.
Interest and Other Expense, Net
Interest and other expense, net consists primarily of interest expense on our debt obligations, changes in the fair value
of our preferred stock warrants and interest income on our cash and cash equivalents and investment balances.
Provision for Income Taxes
Provision for income taxes consists primarily of federal and state income taxes in the United States and income taxes
in foreign jurisdictions in which we conduct business. Due to the uncertainty as to the realization of the benefits of our
domestic deferred tax assets, we have recorded a full valuation allowance against such assets. We intend to continue to maintain
a full valuation allowance on our domestic deferred tax assets until there is sufficient evidence to support the reversal of all or
some portion of these allowances.