El Pollo Loco 2016 Annual Report Download - page 28
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Wecanremainan“emerginggrowthcompany”foruptofiveyearsfromourIPO,oruntiltheearliestof(a)thelastdayofthefirstfiscalyearinwhichourannual
grossrevenuesexceed$1billion,(b)thedatethatwebecomea“largeacceleratedfiler”asdefinedinRule12b-2undertheExchangeAct,whichwouldoccurifthe
marketvalueofourcommonstockthatisheldbynon-affiliatesexceeds$700millionasofthelastbusinessdayofourmostrecentlycompletedsecondfiscal
quarter,or(c)thedateonwhichwehaveissuedmorethan$1billioninnon-convertibledebtsecuritiesintheprecedingthree-yearperiod.
We were not previously required to assess the effectiveness of our internal control over financial reporting, and we may identify deficiencies as we do so.
Section404(a)oftheSarbanes-OxleyActrequiresannualmanagementassessmentsoftheeffectivenessofinternalcontroloverfinancialreporting,startingwith
oursecondannualreport.Priortooursecondannualreport,wewerenotsubjecttothisrequirement,and,inconnectionwiththeimplementationofthenecessary
proceduresandpracticesrelatedtointernalcontroloverfinancialreporting,wemayidentifydeficiencies.
Inaddition,failuretoachieveandmaintainaneffectiveinternalcontrolenvironmentcouldhaveamaterialadverseeffectonourbusinessandstockprice.
The market price and trading volume of our common stock have been and may be volatile, which could result in rapid and substantial losses for our
stockholders.
PriortoourIPO,therewasnopublicmarketforourcommonstock.SharesofourcommonstockweresoldinourIPOinJuly2014atapriceof$15.00pershare,
andourcommonstockhassubsequentlytradedashighas$41.70andaslowas$9.58.Anactive,liquid,andorderlymarketforourcommonstockmaynotbe
sustained,whichcoulddepressthetradingpriceofourcommonstockorcauseittobehighlyvolatileorsubjecttowidefluctuations.Themarketpriceofour
commonstockhasfluctuatedandmaycontinuetofluctuate,ormaydeclinesignificantlyinthefuture.Someofthefactorsthatcouldnegativelyaffectourshare
priceorresultinfluctuationsinthepriceortradingvolumeofourcommonstockinclude:
·variationsinourquarterlyorannualoperatingresults;
·changesinourearningsestimates,ifprovided,ordifferencesbetweenouractualfinancialandoperatingresultsandthoseexpectedbyinvestorsand
analysts;
·thecontentsofpublishedresearchreportsaboutusorourindustry,orthefailureofsecuritiesanalyststocoverourcommonstock;
·additionsordeparturesofkeymanagementpersonnel;
·anyincreasedindebtednessthatwemayincurinthefuture;
·announcementsbyusorothersanddevelopmentsaffectingus;
·actionsbyinstitutionalstockholders;
·litigationandgovernmentalinvestigations;
·legislativeorregulatorychanges;
·judicialpronouncementsinterpretinglawsandregulations;
·changesingovernmentprograms;
·changesinmarketvaluationsofsimilarcompanies;
·speculationorreportsbythepressorinvestmentcommunitywithrespecttousorourindustryingeneral;
·announcementsbyusorourcompetitorsofsignificantcontracts,acquisitions,dispositions,strategicrelationships,jointventures,orcapitalcommitments;
and
·generalmarket,political,andeconomicconditions,includinglocalconditionsinthemarketsinwhichweoperate.
Thesebroadmarketandindustryfactorsmaydecreasethemarketpriceofourcommonstock,regardlessofouractualoperatingperformance.Thestockmarketin
generalhasfromtimetotimeexperiencedextremepriceandvolumefluctuations,includingrecently.Inaddition,inthepast,followingperiodsofvolatilityinthe
overallmarketanddecreasesinthemarketpriceofacompany’ssecurities,securitiesclassactionlitigationhasoftenbeeninstitutedagainstthatcompany.Weare
currentlydefendingagainstsuchlitigation.Seeitem3,“LegalProceedings”.Suchlitigationcouldresultinsubstantialcostsandadiversionofourmanagement’s
attentionandresources.
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