Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

References to the "Company," "Crown," "our," "us" or "we" refer to Crown PropTech Acquisitions. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission ("SEC") filings.

Overview

We are a blank check company incorporated as a Cayman Islands exempted company on September 24, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a "business combination"). Our sponsors are Crown PropTech Sponsor, LLC ("Crown PropTech Sponsor"), a Delaware limited liability company and CIIG Management III LLC ("CIIG"), a Delaware limited liability company, (each, a "sponsor" and together, the "sponsors").

The registration statement for our initial public offering (the "IPO") became effective on February 8, 2021. On February 11, 2021, we consummated the IPO of 27,600,000 units, which included the exercise of the underwriters' option to purchase an additional 3,600,000 units at the IPO price to cover over-allotments (the "Units" with respect to the Class A ordinary shares included in the Units being offered, the "Public Shares" with respect to the one-third of one redeemable warrant included in such Units the "Public Warrant"), at $10.00 per Unit, generating gross proceeds of $276.0 million, and incurring offering costs of approximately $15.8 million, inclusive of approximately $9.66 million in deferred underwriting commissions.

Simultaneously with the closing of the IPO, we consummated the private placement ("Private Placement") of 5,013,333 warrants (each, a "Private Placement Warrant" and collectively, the "Private Placement Warrants"), at a price of $1.50 per Private Placement Warrant with Crown PropTech Sponsor, generating gross proceeds of approximately $7.5 million.

Upon the closing of the IPO and the Private Placement, approximately $276.0 million ($10.00 per Unit) of the net proceeds of the IPO and certain of the proceeds of the Private Placement were placed in a Trust Account ("Trust Account"), located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in United States "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the Trust Account as described below.

Extraordinary General Meetings

May 9, 2025

On May 9, 2025, the Company's shareholders approved an amendment to amend and restate the Company's Fourth Amended and Restated Memorandum and Articles of Association to extend the date by which the Company must consummate an initial Business Combination from May 11, 2025 to March 11, 2026 (the "May 2025 Extension Proposal").

In connection with the vote to approve the May 2025 Extension Proposal, shareholders holding an aggregate of 21,807 shares of the Company's Class A ordinary shares exercised their right to redeem their shares for a pro rata portion of the funds in the Trust Account (as defined below). As a result approximately, $0.25 million (approximately $11.47 per share) was withdrawn from the Trust Account to redeem such shares. Following the redemptions, there were 491,806 Class A ordinary shares issued and outstanding.

Associated with the May 9, 2025 Extraordinary General Meeting, the Company and CIIG entered into non-redemption agreements (the "May 2025 Non-Redemption Agreements") with certain investors pursuant to which, if such investors do not redeem (or validly rescind any redemption requests on) their Class A ordinary shares of the Company (the "May 2025 Non-Redeemed Shares") in connection with the May 9, 2025 Extraordinary General Meeting, CIIG will agree to transfer to such investors Class B ordinary shares held by CIIG immediately following the consummation of an initial Business Combination if they continue to hold such May 2025 Non-Redeemed Shares through the May 9, 2025 Extraordinary General Meeting.

The May 2025 Non-Redemption Agreements provided for the assignment of up 115,287 Class B ordinary shares, par value $0.0001 per share, held by CIIG to the investors in exchange for such Investors agreeing to hold and not redeem certain public shares at the May 9, 2025 Extraordinary General Meeting.

March 9, 2026

On March 9, 2026, the Company's shareholders approved an amendment to amend and restate the Company's Fifth Amended and Restated Memorandum and Articles of Association to extend the date by which the Company must consummate an initial Business Combination from March 11, 2026 to March 11, 2027 (the "March 2026 Extension Proposal").

In connection with the vote to approve the March 2026 Extension Proposal, shareholders holding an aggregate of 7,984 shares of the Company's Class A ordinary shares exercised their right to redeem their shares for a pro rata portion of the funds in the Trust Account (as defined below). As a result, approximately $0.09 million (approximately $11.84 per share) was withdrawn from the Trust Account (described below) to redeem such shares. Following the redemptions, there were 483,822 Class A ordinary shares issued and outstanding.

In March 2026 the Company and CIIG entered into non-redemption agreements (the "March 2026 Non-Redemption Agreements") with certain investors pursuant to which, if such investors do not redeem (or validly rescind any redemption requests on) their Class A ordinary shares of the Company (the "March 2026 Non-Redeemed Shares") in connection with the March 9, 2026 Extraordinary General Meeting, CIIG will assign one Class B ordinary share, par value $0.0001 per share for each 40 public shares not redeemed, accruing monthly beginning April 11, 2026 until the completion of the initial Business Combination, held by CIIG to the investors in exchange for such investors agreeing to hold and not redeem certain public shares at the March 9, 2026 Extraordinary General Meeting.

The March 2026 Non-Redemption Agreements provided for the assignment of 11,529 Class B ordinary shares, par value $0.0001 per share, held by CIIG to the investors, accruing monthly beginning April 11, 2026 until the completion of the initial Business Combination, in exchange for such Investors agreeing to hold and not redeem certain public shares at the March 9, 2026 Extraordinary General Meeting.

Proposed Business Combination

On July 2, 2025, (i) the Company ("SPAC"), (ii) Mkango (Cayman) Limited, an exempted company limited by shares incorporated under the laws of the Cayman Islands and a direct wholly owned Subsidiary of MKAR (as defined below) ("Merger Sub"), (iii) Mkango Rare Earths Limited (f/k/a Lancaster Exploration Limited), a company organized under the laws of the British Virgin Islands ("MKAR", and from and after the Closing, "PubCo"), and a direct, wholly owned subsidiary of Mkango Resources Ltd., a company organized under the laws of British Columbia, Canada (the "Selling Shareholder"), (iv) Mkango Polska s.p. Z.o.o., a company organized under the laws of Poland and a direct, wholly owned subsidiary of Selling Shareholder ("MKA Poland"), (v) Mkango ServiceCo UK Limited, a company organized under the laws of England and a direct, wholly owned subsidiary of Selling Shareholder ("Mkango ServiceCo"), and (vi) MKA Exploration Ltd., a company organized under the laws of the British Virgin Islands and a direct, wholly owned subsidiary of Selling Shareholder ("MKA BVI", and together with MKAR, MKA Poland and Mkango ServiceCo, the "Companies" and, each, a "Company") entered into a business combination agreement (the "Business Combination Agreement").

Pursuant to the Business Combination Agreement, the parties thereto will enter into a business combination transaction by which, among other things, Merger Sub will be merged with and into SPAC, with SPAC being the surviving entity of the Merger and becoming a wholly-owned subsidiary of PubCo. Concurrently therewith, PubCo will become a publicly traded company, expected to operate under the name "Mkango Rare Earths Limited," and its ordinary shares are expected to trade on Nasdaq.

The proposed Merger and the other transactions contemplated by the Business Combination Agreement (collectively, the "Transactions") are expected to be consummated after the required approval by the shareholders of SPAC and the satisfaction of certain other conditions summarized below.

Amendment No. 1 to Business Combination Agreement

On February 13, 2026, SPAC and MKAR entered into Amendment No. 1 to the Business Combination Agreement ("Amendment No. 1"). Amendment No. 1, among other things, amends the pre-closing internal corporate reorganization to establish the ownership structure so that MKAR will own the assets and operations associated with the rare earth project at Songwe Hill in Malawi and the proposed separation plant to be constructed in Pulawy, Poland and extends the Outside Date from March 11, 2026 to September 30, 2026, with an automatic extension to December 31, 2026 if the U.S. Securities and Exchange Commission (the "SEC") has not declared the Proxy/Registration Statement effective by August 14, 2026.

Financial Advisor Service Agreement

On June 1, 2025, the Company engaged Jett Capital Advisors, LLC ("Jett Capital") as financial advisor to advise the Company on their proposed Business Combination with MKAR, Mkango Polska S.P.Z.O.O., MKA BVI, and Mkango ServiceCo UK Limited.

Put Option Buyout Letter Agreement

On June 2, 2025, MKAR agreed to issue and sell a convertible promissory note to an affiliate of the Company's Chairman (the "Investor") in connection with the Proposed Business Combination with a principal amount of $500,000 (the "BCA Note"), as described in the Note Purchase Agreement in the Company's Form 8-K filed with the SEC on June 3, 2025.

The Company's CEO and an affiliated entity of the CEO, entered into a letter agreement (the "Letter Agreement") with the Investor. The Letter Agreement includes a put option buyout by the Company's CEO and/or an affiliated entity of the CEO in the event if for any reason whatsoever Investor is entitled to the repayment of the BCA Note (including, without limitation unpaid and accrued interest and other charges owing pursuant to the terms of the BCA Note), and such payment was not timely made by MKAR.

Results of Operations and Known Trends or Future Events

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for the Initial Public Offering and identifying a target company for our initial business combination. We do not expect to generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on cash and cash equivalents held in the trust account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended March 31, 2026, we had net loss of $1,029,307. We incurred $1,069,505 of operating costs and $10,362 in loan extension agreement expense partially offset by a trust dividend income of $50,560.

For the three months ended March 31, 2025, we had net loss of $712,127. We incurred $772,793 of operating costs, partially offset by trust dividend income of $60,666.

Liquidity, Capital Resources and Going Concern

On February 11, 2021, we consummated our IPO of 27,600,000 Units, at a price of $10.00 per Unit, which included the exercise of the underwriters' option to purchase an additional 3,600,000 Units at the IPO price to cover over-allotments. The Units were sold, generating gross proceeds of $276,000,000. Substantially concurrently with the closing of the IPO, we completed the private sale of 5,013,333 Private Placement Warrants to Crown PropTech Sponsor and the Anchor Investor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds to the Company of $7,520,000.

Following the IPO, the sale of the Private Placement Warrants, and the underwriters' election to fully exercise their over-allotment option, a total of $276,000,000 was placed in the Trust Account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee, and we had $1,919,091 of cash held outside of the Trust Account, after payment of costs related to the IPO, and available for working capital purposes. We incurred $16,505,915 in transaction costs, including $5,520,000 of underwriting fees, $9,660,000 of deferred underwriting fees, $795,825 of excess fair value of the Anchor Investor shares and $530,090 of other offering costs. In December 2022, the underwriters agreed to waive their right to receive any additional deferred underwriting discount.

For the three months ended March 31, 2026, cash used in operating activities was $629,334, resulting from a net loss of $1,029,307 which was impacted trust dividend income of $50,560, loan extension agreement expense of $10,362 and changes in operating assets and liabilities of $440,171.

For the three months ended March 31, 2025, cash used in operating activities was $86,142, resulting from a net loss of $712,127 which was impacted trust dividend income of $60,666 and changes in operating assets and liabilities of $686,651.

As of March 31, 2026 and December 31, 2025, we had cash outside the trust account of $425 available for working capital needs and working capital deficits of $5,737,213 and $5,297,042, respectively. All remaining cash held in the trust account is generally unavailable for our use, prior to an initial business combination, and is restricted for use either in a business combination or to redeem ordinary shares. As of March 31, 2026 and December 31, 2025, none of the amount in the trust account was available to be withdrawn as described above.

Through March 31, 2026, our liquidity needs were satisfied through receipt of $25,000 from the sale of the Founder Shares, the remaining net proceeds from the Initial Public Offering, the sale of Private Placement Warrants, the Promissory Note and the Convertible Note (as defined below) and capital contributions from the Sponsors of $2,007,967.

On November 30, 2021, the Company entered into a convertible note with Richard Chera, its former Chief Executive Officer and director, pursuant to which Mr. Chera agreed to loan the Company up to an aggregate principal amount of $1,500,000 (the "Convertible Note"). The Convertible Note was non-interest bearing and due on the earlier of: (i) 12 months from the date thereof or (ii) the date on which the Company consummates a Business Combination. If the Company does not consummate a Business Combination, the Company may use a portion of any funds held outside the Trust Account to repay the Convertible Note; however, no proceeds from the Trust Account may be used for such repayment if the Company does not consummate the Business Combination. Up to $1,500,000 of the Convertible Note may be converted into warrants at a price of $1.50 per warrant at the option of Mr. Chera (the "Conversion Right"). The warrants would be identical to the Private Placement Warrants.

On May 31, 2023, the Convertible Note was amended and restated (the "A&R Note") in the aggregate principal amount of up to $1,000,000 to be due on the earlier of: (i) February 11, 2024; (ii) the date on which the Company consummates a Business Combination; or (iii) the effective date of a liquidation of the Company. Additionally, due to a waiver by Mr. Chera, the A&R Note no longer provides for the Conversion Right.

On March 28, 2025, the A&R Note in the aggregate principal amount of up to $1,000,000 was amended to be due on the earlier of: (i) February 11, 2026; (ii) the date on which the Company consummates a Business Combination; or (iii) the effective date of a liquidation of the Company ("Second A&R Note").

On February 10, 2026, the Second A&R Note was amended to be due on the earlier of: (i) December 31, 2026; (ii) the date on which the Company consummates a Business Combination; or (iii) the effective date of a liquidation of the Company ("Third A&R Note"). In connection with the execution of the Third A&R Note, CIIG Management III LLC has agreed to transfer additional Class B Ordinary Shares to an unaffiliated third party in an amount equal to the product of the number of months from February 2026 until the date on which SPAC consummates a Business Combination and 2,500 and subject to the same transfer restrictions that are imposed on CIIG Management III LLC.

For the three months ended March 31, 2026, CIIG has paid expenses on behalf of the Company in the amount of $629,334 and is reported on the statements of changes in shareholders' deficit as a capital contribution from Sponsor.

Borrowing under the A&R Note and the advances from CIIG are reported on the balance sheets as due to related parties. At March 31, 2026 and December 31, 2025, the Company reported $1,592,586 on the balance sheets.

The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the unaudited condensed financial statements are issued. Although no formal agreement exists, the Sponsors are committed to extend loans as needed.

Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not limited to, curtailing operations, suspending the pursuit of a potential merger target, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to in on commercially acceptable terms, if at all, or that its plans to consummate an initial Business Combination will be successful.

In connection with the Company's assessment of going concern considerations in accordance with ASC 205-40, "Presentation of Financial Statements-Going Concern," management has determined that the above liquidity issues and the mandatory liquidation and subsequent dissolution, should the Company be unable to complete a Business Combination, raises substantial doubt about the Company's ability to continue as a going concern. The Company has until March 11, 2027, or by the end of any extension to the Combination Period, to consummate a Business Combination. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of time within one year from the date that the unaudited condensed financial statements are issued. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March 11, 2027.

Commitments and Contingencies

Registration Rights

The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of working capital loans (and any ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the working capital loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed prior to the effective date of the IPO requiring the Company to register such securities for resale. The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain "piggyback" registration rights with respect to registration statements filed subsequent to the completion of a business combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Advisory Service Agreements

We may enlist various entities as capital market advisors to assist in the identification and consummation of an initial business combination. Fees for such services will be payable only upon consummation of an initial business combination by us.

As discussed above, on June 1, 2025, the Company engaged Jett Capital as financial advisor to advise the Company on their proposed Business Combination with MKAR, Mkango Polska S.P.Z.O.O., MKA BVI, and Mkango ServiceCo UK Limited. Except for $100,000 due upon execution of the agreement, fees for such services will be payable only upon consummation of an initial business combination by us.

A&R Note

On November 30, 2021, we entered into a convertible promissory note with Richard Chera, our former Chief Executive Officer and Director, pursuant to which Mr. Chera agreed to loan us up to an aggregate principal amount of $1,500,000. On May 31, 2023, the promissory note was amended and restated in the aggregate principal amount of up to $1,000,000. On March 28, 2025, the A&R Note in the aggregate principal amount of up to $1,000,000 was amended to be due on the earlier of: (i) February 11, 2026; (ii) the date on which the Company consummates a Business Combination; or (iii) the effective date of a liquidation of the Company. See "Liquidity and Capital Resources."

On February 10, 2026, the Second A&R Note was amended to replace "February 11, 2026" with December 31, 2026 (the "Third A&R Note"). In connection with the execution of the Third A&R Note, CIIG Management III LLC has agreed to transfer additional CPTK Class B Ordinary Shares to an unaffiliated third party in an amount equal to the product of the number of months from February 2026 until the date on which SPAC consummates a Business Combination and 2,500 and subject to the same transfer restrictions that are imposed on CIIG Management III LLC.

Contractual Obligation

We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities other than described above.

Critical Accounting Estimates

The preparation of these unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. We have not identified any critical accounting estimates other than the non-redemption agreement discussed below.

Significant Accounting Policies

Non-Redemption Agreements

In 2024, the Company and CIIG entered into certain non-redemption agreements and assignments of economic interests (the "Non-Redemption Agreements") with certain investors (the "Non-Redeeming Investors"). The Non-Redemption Agreements provide for the assignment of economic interest of Class B ordinary shares held by CIIG to the Non-Redeeming Investors in exchange for such Non-Redeeming Investors agreeing to hold and not redeem Class A ordinary shares at the Extraordinary General Meetings. Pursuant to the Non-Redemption Agreements, CIIG has agreed to transfer to such Non-Redeeming Investors Class A ordinary shares upon conversion of the Class B ordinary shares in connection with the consummation of an initial Business Combination. For the year ended December 31, 2024, the Company estimated the aggregate fair value of the Class B ordinary shares attributable to the Non-Redeeming Investors to be $451,322 or $0.78 per share.

Beginning on May 6, 2025, and continuing until the May 9, 2025 Extraordinary General Meeting, the Company and CIIG entered into Non-Redemption Agreements with the Non-Redeeming Investors. The Non-Redemption Agreements provide for the assignment of economic interest of an aggregate of 115,287 Class B ordinary shares held by CIIG to the Non-Redeeming Investors in exchange for such Non-Redeeming Investors agreeing to hold and not redeem an aggregate of 461,146 Class A ordinary shares at the May 9, 2025 Extraordinary General Meeting. Pursuant to the Non-Redemption Agreements, CIIG has agreed to transfer to such Non-Redeeming Investors an aggregate of 115,287 Class A ordinary shares upon conversion of the Class B ordinary shares in connection with the consummation of an initial Business Combination. For the three months ended March 31, 2026, the Company estimated the aggregate fair value of the 115,287 Class B ordinary shares attributable to the Non-Redeeming Investors to be $223,138 or $1.94 per share.

In March 2026 the Company and CIIG entered into non-redemption agreements (the "March 2026 Non-Redemption Agreements") with certain investors pursuant to which, if such investors do not redeem (or validly rescind any redemption requests on) their Class A ordinary shares of the Company (the "March 2026 Non-Redeemed Shares") in connection with the March 9, 2026 Extraordinary General Meeting, CIIG will assign one Class B ordinary share, par value $0.0001 per share for each 40 public shares not redeemed, accruing monthly beginning April 11, 2026 until the completion of the initial Business Combination, held by CIIG to the investors in exchange for such investors agreeing to hold and not redeem certain public shares at the March 9, 2026 Extraordinary General Meeting.

The March 2026 Non-Redemption Agreements provided for the assignment of 11,529 Class B ordinary shares, par value $0.0001 per share, held by CIIG to the investors, accruing monthly beginning April 11, 2026 until the completion of the initial Business Combination, in exchange for such Investors agreeing to hold and not redeem certain public shares at the March 9, 2026 Extraordinary General Meeting.

Each Non-Redeeming Investor acquired from the Sponsors an indirect economic interest in the Founder Shares. The value of the Non-Redemption Agreements is reported as a component of shareholders' deficit. The excess of the fair value of the Founder Shares was determined to be non-redemption agreement expense in accordance with SAB Topic 5T.

We utilized a model to determine the fair value of the Non-Redemption Agreements using observable and unobservable assumptions about current and anticipated events. Significant assumptions include the probability and timing of consummating a business combination. Significant variations in these assumptions could have a material impact to the unaudited condensed financial statements.

Loan Extension Agreement

On February 10, 2026, the A&R Note (discussed in Note 5) was amended to replace "February 11, 2026" with December 31, 2026 (the "Third A&R Note"). In connection with the execution of the Third A&R Note, CIIG Management III LLC has agreed to transfer additional Class B Ordinary Shares upon consummation of a Business Combination to an unaffiliated third party in an amount equal to the product of the number of months from February 2026 until the date on which Company consummates a Business Combination and 2,500 and subject to the same transfer restrictions that are imposed on CIIG Management III LLC (the "Loan Extension Agreement").

The loan extension agreement provides for us to transfer shares of the company to a third party under certain conditions.

The Company complies with Staff Accounting Bulletin Topic 5T and recognizes a capital contribution, as the potential transfer of these shares is a benefit to the Company.

The value of the Loan Extension Agreements is reported as a component of shareholders' deficit. The excess of the fair value of the Founder Shares was determined to be Loan Extension Agreement expense in accordance with SAB Topic 5T.

Recent Accounting Standards

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company's unaudited condensed financial statements.

Off-Balance Sheet Arrangements

As of March 31, 2026, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

JOBS Act

The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.