Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report.
In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
(b) Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended). Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 framework). All control systems are subject to inherent limitations. Our management has concluded that, as of December 31, 2021, our internal control over financial reporting is effective based on these criteria. Additionally, our independent registered public accounting firm, Deloitte & Touche LLP, has issued an audit report on the Company's internal control over financial reporting, which appears in Part II, Item 8 of this Annual Report on Form 10-K.
(c) Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2021, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We continue to monitor the impact of the COVID-19 pandemic and, despite many of our employees working remotely, have not experienced any changes that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information concerning our directors, compliance with Section 16(a) of the Exchange Act, our Audit Committee and any changes to the process by which stockholders may recommend nominees to the Board required by this Item are incorporated herein by reference to information contained in the Proxy Statement, including “Proposal No. 1 Election of Directors,” “Committees of our Board of Directors,” “Delinquent Section 16(a) Reports” and “Stockholder Proposals to Be Presented at Next Annual Meeting.” The Proxy Statement will be filed with the SEC within 120 days of the fiscal year ended December 31, 2021.
The information concerning our executive officers required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Our Management.”
We have adopted a code of ethics, our Code of Business Conduct and Ethics, which applies to all employees, including our principal executive officer, our principal financial officer, and all other executive officers, and our board of directors. The Code of Business Conduct and Ethics is available on our website at investor.chegg.com under “Corporate Governance.” We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Business Conduct and Ethics by posting such information on our website at the address and location specified above.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Compensation Committee Interlocks and Insider Participation” and “Executive Compensation.”
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Equity Compensation Plan Information,” “Transactions with Related Parties, Founders and Control Persons,” and “Independence of Directors.”
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Corporate Governance Standards and Director Independence” “Transactions with Related Parties, Founders and Control Persons” and “Termination and Change of Control Arrangements.”
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Proposal No. 3 Ratification of Independent Registered Public Accounting Firm.”
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
We have filed the following documents as part of this Annual Report on Form 10-K:
1. Consolidated Financial Statements
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) 49
Consolidated Balance Sheets
52
Consolidated Statements of Operations
53
Consolidated Statements of Comprehensive Loss
54
Consolidated Statements of Stockholders’ Equity
55
Consolidated Statements of Cash Flows
56
Notes to Consolidated Financial Statements
57
2. Financial Statement Schedules
Schedule II-Valuation and Qualifying Accounts (in thousands):
Years Ended December 31, 2021, 2020 and 2019
Balance at Beginning of Year
Provision (Release) for Bad Debts Net Write-offs Balance at End of Year
Accounts receivable allowance
2021 $ 153 $ 57 $ ( 57 ) $ 153
2020 56 191 ( 94 ) 153
2019 229 ( 79 ) ( 94 ) 56
Years Ended December 31, 2021, 2020 and 2019
Balance at Beginning of Year
Provision for Refunds Refunds Issued Balance at End of Year
Refund reserve
2021 $ 1,515 $ 58,553 $ ( 58,676 ) $ 1,392
2020 554 44,171 ( 43,210 ) 1,515
2019 396 24,987 ( 24,829 ) 554
All other financial statement schedules are omitted because they are not applicable or the information is included in the Registrant’s consolidated financial statements or related notes.
3. Exhibits
Incorporated by Reference
Exhibit No. Exhibit Form File No. Filing Date Exhibit No. Filed
Herewith
3.01
Restated Certificate of Incorporation of Chegg, Inc. effective November 18, 2013
10-K 001-36180 3/4/16 3.01
3.02
Amended and Restated Bylaws of Chegg, Inc., as amended on September 19, 2018.
8-K 001-36180 9/20/18 3.1
4.01
Form of Chegg, Inc.’s Common Stock Certificate
S-1/A 333-190616 10/01/13 4.01
4.02
Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934
10-K 001-36180 2/20/20 4.04
4.03
Indenture dated April 3, 2018 between Chegg, Inc. and Wells Fargo Bank, National Association.
8-K 001-36180 4/3/18 4.1
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4.04
Indenture dated March 26, 2019 between Chegg, Inc. and Wells Fargo Bank, National Association.
8-K 001-36180 3/26/19 4.1
4.05
Indenture dated August 21, 2020 between Chegg, Inc. and Wells Fargo Bank, National Association
8-K 001-36180 08/24/20 4.1
10.01*
Form of Indemnification Agreement entered into between Chegg, Inc. and each of its directors and executive officers
S-1/A 333-190616 10/01/13 10.01
10.02*
2013 Equity Incentive Plan, and forms of agreement thereunder
S-1/A 333-190616 10/25/13 10.04
10.03*
2013 Employee Stock Purchase Plan
S-1 333-190616 08/14/13 10.05
10.04*
Offer Letter between Dan Rosensweig and Chegg, Inc., dated December 3, 2009
S-1 333-190616 08/14/13 10.06
10.05*
Amendment to Offer Letter between Dan Rosensweig and Chegg, Inc., dated November 29, 2012
S-1 333-190616 08/14/13 10.07
10.06*
Offer Letter between Andy Brown and Chegg, Inc., dated September 2, 2011
10-K 001-36180 3/6/14 10.07
10.07*
Amendment to Offer Letter between Andy Brown and Chegg, Inc., dated November 29, 2012
10-K 001-36180 3/6/14 10.08
10.08*
Offer Letter between Nathan Schultz and Chegg, Inc., dated February 19, 2008
S-1 333-190616 8/14/13 10.09
10.09*
Offer Letter between John Fillmore and Chegg, Inc., dated May 10, 2013
10-K 001-36180 2/20/20 10.14
10.10*
Offer Letter between Esther Lem and Chegg, Inc. dated December 9, 2010
X
10.11
Lease between Silicon Valley CA-I, LLC and Chegg, Inc., dated as of May 14, 2012
S-1 333-190616 08/14/13 10.14
10.12
Commencement Date Memorandum between Silicon Valley CA-I, LLC and Chegg, Inc., dated as of October 12, 2012
S-1 333-190616 08/14/13 10.15
10.13
First Amendment dated as of June 4, 2018 by and between Chegg, Inc. and Freedom Circle LLC.
8-K 001-36180 6/5/18 99.1
10.14
Forms of Agreement for 2013 Equity Plan Agreement
10-Q 001-3618 7/29/19 10.02
10.15
Form of Agreement for Change-in-Control Severance Plan
10-Q 001-36180 7/29/19 10.03
10.16
Form of Base Capped Call Transaction Confirmation (2025 notes)
8-K 001-36180 3/26/19 99.1
10.17
Form of Additional Capped Call Transaction Confirmation (2025 notes)
8-K 001-36180 4/5/19 99.1
10.18
Form of Base Capped Call Transaction Confirmation (2026 notes)
8-K 001-36180 8/24/20 99.1
10.19
Form of Additional Capped Call Transaction Confirmation (2026 notes)
8-K 001-36180 8/24/20 99.2
21.01
List of Subsidiaries
X
23.01
Consent of Independent Registered Public Accounting Firm
X
24.01
Power of Attorney (included on signature page hereto)
X
31.01
Certification of Dan Rosensweig, Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.02
Certification of Andrew Brown, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
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32.01**
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document X
101.SCH XBRL Taxonomy Extension Schema X
101.CAL XBRL Taxonomy Extension Calculation X
101.LAB XBRL Taxonomy Extension Labels X
101.PRE XBRL Taxonomy Extension Presentation X
101.DEF XBRL Taxonomy Extension Definition X
104 Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit) X
* Indicates a management contract or compensatory plan.
** This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHEGG, INC.
February 22, 2022 By: /S/ DAN ROSENSWEIG
Dan Rosensweig
President, Chief Executive Officer and Co-Chairperson
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Dan Rosensweig, Andrew Brown and Woodie Dixon Jr., and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Name Title Date
/S/ DAN ROSENSWEIG President, Chief Executive Officer and Co-Chairperson February 22, 2022
Dan Rosensweig (Principal Executive Officer)
/S/ ANDREW BROWN Chief Financial Officer February 22, 2022
Andrew Brown (Principal Financial Officer)
/S/ DAVID LONGO Vice President, Chief Accounting Officer, Corporate Controller, and Assistant Treasurer February 22, 2022
David Longo (Principal Accounting Officer)
/S/ SARAH BOND Director February 22, 2022
Sarah Bond
/S/ RENEE BUDIG Director February 22, 2022
Renee Budig
/S/ PAUL LEBLANC Director February 22, 2022
Paul LeBlanc
/S/ MARNE LEVINE Director February 22, 2022
Marne Levine
/S/ MARCELA MARTIN Director February 22, 2022
Marcela Martin
/S/ RICHARD SARNOFF Director and Co-Chairperson February 22, 2022
Richard Sarnoff
/S/ TED SCHLEIN Director February 22, 2022
Ted Schlein
/S/ MELANIE WHELAN Director February 22, 2022
Melanie Whelan
/S/ JOHN YORK Director February 22, 2022
John York
95