Enom 2010 Annual Report Download - page 45

Table of Contents
general political and economic conditions.
In addition, the stock market in general, and the market for Internet-related companies in particular, has experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Securities class action litigation has often
been instituted against companies following periods of volatility in the overall market and in the market price of a company's securities. This litigation, if
instituted against us, could result in very substantial costs, divert our management's attention and resources and harm our business, operating results and
financial condition. In addition, the recent distress in the financial markets has also resulted in extreme volatility in security prices.
The large number of shares eligible for public sale or subject to rights requiring us to register them for public sale could depress the market price of our
common stock.
The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, and the
perception that these sales could occur may also depress the market price of our common stock. As of January 31, 2011, we had 82,852,253 shares of common
stock outstanding. Of these shares, a substantial majority are currently restricted as a result of securities laws, lock-up agreements or other contractual
restrictions that restrict transfers for at least 180 days after the date of the closing of our initial public offering, which is July 24, 2011, subject to certain
extensions.
Beginning on such date, stockholders owning an aggregate of approximately 62,681,588 shares will be entitled, under contracts providing for registration
rights, to require us to register shares of our common stock owned by them for public sale in the United States, subject to the restrictions of Rule 144.
In addition, we have registered approximately 41,878,864 shares reserved for future issuance under our equity compensation plans and agreements.
Subject to the satisfaction of applicable exercise periods, vesting requirements and, in certain cases, lock-up agreements, the shares of common stock issued
upon exercise of outstanding options, vesting of future awards or pursuant to purchases under our employee stock purchase plan will be available for
immediate resale in the United States in the open market.
Sales of our common stock as restrictions end or pursuant to registration rights may make it more difficult for us to sell equity securities in the future at a
time and at a price that we deem appropriate. These sales also could cause our stock price to fall and make it more difficult for shareholders to sell shares of
our common stock.
We also may issue our shares of common stock from time to time as consideration for future acquisitions and investments. If any such acquisition or
investment is significant, the number of shares that we may issue may in turn be significant. In addition, we may also grant registration rights covering those
shares in connection with any such acquisitions and investments.
We are obligated to develop and maintain proper and effective internal controls over financial reporting and will be subject to other requirements that will
be burdensome and costly. We may not complete our analysis of our internal controls over financial reporting in a timely manner, or these internal
controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common
stock.
We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, to furnish a report by management on, among other things, the
effectiveness of our internal control over financial reporting for fiscal year ending on December 31, 2011. This assessment will need to include disclosure of
any material weaknesses identified by our management in our internal control over financial
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