GrubHub Financial Report Summaries

Risks

• The Transaction is subject to customary closing conditions, and if these conditions are not satisfied or waived, the Transaction may not be completed on a timely basis or at all.
• Failure to consummate the Transaction could negatively impact the share price and the future business and financial results of the Company.
• The Merger Agreement contains provisions that limit the Company’s ability to pursue alternatives to the Transaction.
• Because the number of JET ADSs that our stockholders will be entitled to receive as a result of the Transaction will be based on a fixed exchange ratio, and the value of the JET Shares underlying the JET ADSs has fluctuated and will continue to fluctuate, our stockholders cannot be sure of the value of the merger consideration they will receive.
• While the Transaction is pending, the Company will be subject to business uncertainties which could adversely affect the Company’s business, results of operations, financial condition and cash flows.
• If completed, the Transaction may not achieve its intended results.
• After the Transaction, our stockholders will have a significantly lower ownership and voting interest in JET than they currently have in the Company and will exercise less influence over management.
• The JET ADSs to be received by our stockholders upon completion of the Transaction will be subject to different rights from shares of our common stock.
• The Company and JET may be targets of legal proceedings that could result in substantial costs and may delay or prevent the Transaction from being completed.
• The Company and JET will incur substantial transaction fees and costs in connection with the Transaction.
• The market price of the JET ADSs after the Transaction may be affected by factors different from those currently affecting the market price of our common stock.
• Health epidemics, including the COVID-19 pandemic, may have an adverse impact on our business.
• If we fail to retain our existing restaurants and diners or to acquire new restaurants and diners in a cost-effective manner, our revenue may decrease and our business may be harmed.
• We compete with both the traditional offline ordering process and online food ordering businesses. Adherence to this traditional ordering method, together with increasing pressure from existing and new companies that offer online ordering could harm our business and results of operations.
• Growth of our business will depend on a strong brand and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our base of restaurants and diners and our ability to increase their level of engagement.
• We rely on restaurants in our network for many aspects of our business, and any failure by them to maintain their service levels could harm our business.
• We may not continue to grow at historical rates or maintain profitability in the future.
• If we fail to manage our growth effectively, our brand, results of operations and business could be harmed.
• We make the restaurant and diner experience our highest priority. Our dedication to making decisions based primarily on the best interests of restaurants and diners may cause us to forego short-term opportunities, which could impact our profitability.
• If we do not continue to innovate and provide useful products or if our introduced products do not perform or are not adopted by restaurants in accordance with our expectations, we may not remain competitive and our business and results of operations could suffer.
• If use of the Internet via websites, mobile devices and other platforms, particularly with respect to online food ordering, does not continue to increase as rapidly as we anticipate, our business and growth prospects will be harmed.
• Grubhub is expanding its independent contractor driver network. The status of the drivers as independent contractors, rather than employees, has been and will likely continue to be challenged. A reclassification of the drivers as employees could harm our business or results of operations.
• We face potential liability, expenses for legal claims and harm to our business based on the nature of our business and the content on our platform.
• Government regulation of the Internet and e-commerce is evolving, and unfavorable changes could substantially harm our business and results of operations.
• Our business is subject to a variety of U.S. laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business or results of operations.
• If our security measures are compromised, or if our platform is subject to attacks that degrade or deny the ability of restaurants and diners to access our content, restaurants and diners may curtail or stop use of our platform.
• Our failure to protect personal information provided by our diners against inappropriate disclosure, including security breaches, could violate applicable law and contracts with our service providers and could result in liability to us, damage to our reputation and brand and harm to our business.
• We may not timely and effectively scale and adapt our existing technology and network infrastructure to ensure that our platform is accessible, which would harm our reputation, business and results of operations.
• We are subject to payment-related risks, and if payment processors are unwilling or unable to provide us with payment processing service or impose onerous requirements on us in order to access their services, or if they increase the fees they charge us for these services, our business and results of operations could be harmed.
• We rely on third parties, including our payment processor, cloud providers and data center host, and if these or other third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business and results of operations could be harmed.
• Unfavorable media coverage could harm our business and results of operations.
• Our business, and that of our third-party providers and third-party data center, is subject to the risks of severe weather, earthquakes, fires, floods, hurricanes and other natural catastrophic events and to interruption by man-made problems such as computer viruses or terrorism.
• Acquisitions could disrupt our business and harm our business and results of operations.
• The loss of key senior management personnel could harm our business and future prospects.
• We depend on talented personnel to grow and operate our business, and if we are unable to hire, retain, manage and motivate our personnel, or if our new personnel do not perform as we anticipate, we may not be able to grow effectively.
• Failure to adequately protect our intellectual property could harm our business and results of operations.
• We may be unable to continue to use the domain names that we use in our business, or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks.
• Intellectual property infringement assertions by third parties could result in significant costs and harm our business, results of operations and reputation.
• Some of our products contain open source software, which may pose particular risks to our proprietary software and products.
• Increases in food, labor, energy and other costs could adversely affect results of operations.
• We experience significant seasonal fluctuations in our financial results, which could cause our stock price to fluctuate.
• We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.
• The impact of economic conditions, including the resulting effect on consumer spending, may harm our business and results of operations.
• The agreements governing our senior debt contain operating and financial covenants that may restrict our business and financing activities.
• In addition to the capital available under the credit facility, we may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
• Our business and results of operations may be harmed if we are deemed responsible for the collection and remittance of state sales taxes for our restaurants.
• A significant portion of our common stock is held by our existing executive officers, directors and holders of 5% or more of our outstanding common stock, whose interests may differ from yours.
• The trading price of our common stock has been and may continue to be volatile, and you could lose all or part of your investment.
• Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
• We do not expect to declare any dividends in the foreseeable future.
• As a public company, we incur significant costs to comply with the laws and regulations affecting public companies which could harm our business and results of operations.
• If securities or industry analysts issue an adverse or misleading opinion regarding our common stock or do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, our stock price and trading volume could decline.
• If we are unable to implement and maintain effective internal control over financial reporting, the accuracy and timeliness of our financial reporting may be adversely affected.