References to "we", "us", "our" or the "Company" are to RMG Acquisition
Corporation II, except where the context requires otherwise. The following
discussion should be read in conjunction with our condensed financial statements
and related notes thereto included elsewhere in this report.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act that
are not historical facts, and involve risks and uncertainties that could cause
actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form
10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"anticipate," "believe," "continue," "could," "estimate," "expect," "intends,"
"may," "might," "plan," "possible," "potential," "predict," "project," "should,"
"would" and variations thereof and similar words and expressions are intended to
identify such forward-looking statements. Such forward-looking statements relate
to future events or future performance, but reflect management's current
beliefs, based on information currently available. A number of factors could
cause actual events, performance or results to differ materially from the
events, performance and results discussed in the forward-looking statements. For
information identifying important factors that could cause actual results to
differ materially from those anticipated in the forward-looking statements,
please refer to the Risk Factors section of the Company's amendment No. 2 to its
Annual Report on Form
10-K/A
for the year ended December 31, 2021 filed with the SEC on May 11, 2021. The
Company's securities filings can be accessed on the EDGAR section of the SEC's
website at www.sec.gov. Except as expressly required by applicable securities
law, the Company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future events
or otherwise.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
on July 28, 2020 (date of inception) for the purpose of effecting a merger,
share exchange, asset acquisition, share purchase, reorganization or similar
business combination with one or more businesses that the Company has not yet
identified (the "Business Combination"). We are an emerging growth company and,
as such, we are subject to all of the risks associated with emerging growth
companies. Our sponsor is RMG Sponsor II, LLC, a Delaware limited liability
company (the "Sponsor").
Our registration statement for our initial public offering (the "Initial Public
Offering") was declared effective on December 9, 2020. On December 14, 2020, we
consummated our Initial Public Offering of 34,500,000 units (the "Units" and,
with respect to the Class A ordinary shares included in the Units being offered,
the "Public Shares"), including 4,500,000 additional Units to cover
over-allotments (the "Over-Allotment Units"), at $10.00 per Unit, generating
gross proceeds of $345.0 million, and incurring offering costs of approximately
$19.7 million, inclusive of approximately $12.1 million in deferred underwriting
commissions and $400,000 in deferred legal fees.
Simultaneously with the closing of our Initial Public Offering, we consummated
the private placement ("Private Placement") of 7,026,807 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants")
at a price of $1.50 per Private Placement Warrant to our Sponsor, generating
proceeds of approximately $10.5 million.
Upon the closing of our Initial Public Offering and the Private Placement,
$345.0 million ($10.00 per Unit) of the net proceeds of our Initial Public
Offering and certain of the proceeds of the Private Placement was held in a
trust account ("Trust Account") with Continental Stock Transfer & Trust Company
acting as trustee and invested in United States government treasury bills with a
maturity of 185 days or less or in money market funds investing solely in U.S.
Treasuries and meeting certain conditions under Rule
2a-7
under the Investment Company Act 1940, as amended, or the Investment Company
Act, 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.
If we are unable to complete a Business Combination within 24 months from the
closing of our Initial Public Offering, or December 14, 2022 (the "Combination
Period"), we will (i) cease all operations except for the purpose of winding up;
(2) as promptly as reasonably possible but not more than 10 business days
thereafter, redeem the Public Shares, at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, including interest (less up to $100,000 of interest to pay
dissolution expenses and which interest shall be net of taxes payable, expenses
relating to the administration of the trust account and limited withdrawals for
working capital), divided by the number of then issued and outstanding Public
Shares, which redemption will completely extinguish Public Shareholders' rights
as shareholders (including the right to receive further liquidating
distributions, if any); and (3) as promptly as reasonably possible following
such redemption, subject to the approval of the remaining shareholders and the
board of directors, liquidate and dissolve, subject in each case to our
obligations under Cayman Islands law to provide for claims of creditors and the
requirements of other applicable law.

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Proposed ReNew India Business Combination
On February 24, 2021, we entered into a Business Combination Agreement (the
"Business Combination Agreement") with Philip Kassin, in his capacity as the
representative for the shareholders of the Company, ReNew India, (iv) ReNew
Energy Global Limited, a private limited company incorporated under the laws of
England and Wales ("ReNew Global"), (v) ReNew Power Global Merger Sub, a Cayman
Islands exempted company ("Merger Sub") and (vi) certain shareholders of ReNew
India named in the Business Combination Agreement (the "Major Shareholders"),
pursuant to which the Company will effect a Business Combination with ReNew
Energy Global Limited, a company with limited liability incorporated under the
laws of India (the "ReNew India Business Combination"). Prior to the completion
of the transactions contemplated by the Business Combination Agreement,
(i) Merger Sub shall be a wholly-owned subsidiary of ReNew Global and (ii) ReNew
Global shall be an independent entity wholly-owned by a third party. Pursuant to
the terms of the Business Combination Agreement, (i) Merger Sub will merge with
and into the Company, with the Company surviving (the "Merger") and
(ii) following the Merger, the Major Shareholders will transfer, and ReNew
Global will acquire, shares of ReNew India in exchange for the issuance of ReNew
Global shares and the payment of cash. As a result of the Merger, at the closing
of the Merger (i) all the assets and liabilities of the Company and Merger Sub
shall vest in and become the assets and liabilities of the Company as the
surviving company, and the Company shall thereafter exist as a wholly-owned
subsidiary of ReNew Global, (ii) each share of Merger Sub issued and outstanding
immediately prior to the Merger Effective Time (as defined in the Business
Combination Agreement) shall automatically be cancelled and shall cease to
exist, (iii) the board of directors and executive officers of Merger Sub shall
resign, and the board of directors and executive officers of the Company shall
be as determined among the Company, ReNew India and ReNew Global, and (iv) each
issued and outstanding security of the Company immediately prior to the closing
shall be cancelled in exchange for the issuance of certain shares of ReNew
Global.
In consideration for the Merger, (i) each Unit issued and outstanding
immediately prior to the Merger Effective Time shall be automatically detached
and the holder thereof shall be deemed to hold one Class A ordinary share and
one-third
of one redeemable warrant, subject to certain conditions and (ii) immediately
following the separation of each Unit each (a) Class A ordinary share issued and
outstanding immediately prior to the closing shall be cancelled in exchange for
the issuance of one Class A ordinary share of ReNew Global ("ReNew Global
Class A Share") and (b) Class B ordinary share issued and outstanding
immediately prior to the closing will convert to one Class A ordinary share and
shall be cancelled in exchange for the issuance of one ReNew Global Class A
Share, and (c) immediately following such cancellation, the Company shall issue
43,125,000 Class A ordinary shares to ReNew Global in consideration for the of
ReNew Global Class A Shares, (d) each redeemable warrant shall remain
outstanding, but shall be adjusted to become a warrant to purchase 1.0917589
ReNew Global Class A Shares (each, a "Company Adjusted Warrant"), which shall be
subject to the terms and conditions set forth in the Amended and Restated
Warrant Agreement to be executed in connection with the closing (including any
repurchase rights and cashless exercise provisions), except that each Company
Adjusted Warrant will be exercisable (or will become exercisable in accordance
with its terms) for 1.0917589 ReNew Global Class A Shares.
Following the Merger, subject to the terms and conditions set forth in the
Business Combination Agreement, each Major Shareholder shall transfer all of
their shares of ReNew India ordinary stock to ReNew Global (excluding any
Company Exchanged Conversion Stock (as defined in the Business Combination
Agreement) and held by any Major Shareholder) as consideration and in exchange
for (i) the issuance of a certain number and class of shares of ReNew Global and
(ii) the payment by ReNew Global to certain Major Shareholders of the following
cash amounts: (a) $242,000,000 to GS Wyvern Holdings Limited, (b) $92,000,000 to
the Canada Pension Plan Investment Board, (c) $90,000,000 to Green Rock B 2014
Limited, (d) $62,000,000 to the founder investors and (e) $14,000,000 to GEF
SACEF India.
In connection with the execution of the Business Combination Agreement, ReNew
Global and the Company entered into Subscription Agreements with certain
accredited investors or qualified institutional buyers (collectively, the
"Subscription Investors") concurrently with the execution of the Business
Combination Agreement on February 24, 2021. Pursuant to the Subscription
Agreements, the Subscription Investors agreed to subscribe for and purchase, and
ReNew Global agreed to issue and sell, to the Subscription Investors an
aggregate of 85,500,000 shares of ordinary shares of ReNew Global for a purchase
price of $10.00 per share, or an aggregate of approximately $855 million, in a
private placement.
For more information about the Business Combination Agreement and the proposed
ReNew India Business Combination, see our Definitive Proxy Statement filed with
the SEC on July 28, 2021. Unless specifically stated, this Quarterly Report does
not give effect to the proposed ReNew India Business Combination and does not
contain the risks associated with the proposed ReNew India Business Combination.
Such risks and effects relating to the proposed ReNew India Business Combination
are included in the Definitive Proxy Statement filed with the SEC on July 28,
2021.

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Results of Operations
Our only activities from inception through June 30, 2021 were those related to
our formation, the preparation for our Initial Public Offering and activities in
connection with the acquisition of ReNew. We incurred expenses as a result of
being a public company (including for legal, financial reporting, accounting and
auditing compliance), as well as for due diligence and other merger and
acquisition expenses in connection with searching for, and completing, a
Business Combination.
For the three months ended June 30, 2021, we had a net loss of approximately
$5.3 million, which consists of changes in the derivative warrant liabilities of
approximately $4.3 million, and approximately $1.0 million in general and
administrative costs, partially offset by unrealized gain on investments held in
the Trust Account of approximately $5,000.
For the six months ended June 30, 2021, we had a net loss of approximately
$855,000, which consists of changes in the derivative warrant liabilities of
approximately $926,000 and unrealized gain on investments held in the Trust
Account of approximately $10,000, partially offset by approximately $1.8 million
in general and administrative costs.
Liquidity and Capital Resources
As of June 30, 2021, we had approximately $1.1 million in our operating bank
account and working capital of approximately $1.3 million. We used these funds
primarily to identify and evaluate target businesses, perform business due
diligence on prospective target businesses, travel to and from the offices,
plants or similar locations of prospective target businesses or their
representatives or owners, review corporate documents and material agreements of
prospective target businesses, structure, negotiate and complete a Business
Combination.
Our liquidity needs prior to the consummation of our Initial Public Offering
were satisfied through the payment of $25,000 by our Sponsor to cover certain
expenses on behalf of us in exchange for issuance of Founders Shares, and loan
proceeds from our Sponsor of approximately $151,000 under the Note (as defined
below). We repaid the Note in full on December 15, 2020. Subsequent to the
consummation of our Initial Public Offering, our liquidity needs have been
satisfied through the net proceeds from the consummation of our Initial Public
Offering and our Private Placement held outside of the Trust Account.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity to meet its needs through the earlier of the
consummation of a Business Combination or one year from this filing. Over this
time period, we will be using the funds held outside of the Trust Account for
paying existing accounts payable, identifying and evaluating prospective
Business Combination candidates, performing due diligence on prospective target
businesses, paying for travel expenditures, selecting the target business to
merge with or acquire, and structuring, negotiating and consummating the
Business Combination.
In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor, members of our founding team or any of their
affiliates may, but are not obligated to, loan us funds as may be required
("Working Capital Loans"). As of June 30, 2021, there were no amounts
outstanding under any Working Capital Loan.
We continue to evaluate the impact of the
COVID-19
pandemic and has concluded that the specific impact is not readily determinable
as of the date of the balance sheet. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Related Party Transactions
Founder Shares
In July 2020, our Sponsor paid an aggregate of $25,000 to cover for certain
expenses on our behalf in exchange for issuance of 10,062,500 Class B ordinary
shares (the "Founder Shares"). On December 2, 2020, our Sponsor effected a
surrender of 2,875,000 Class B ordinary shares to us for no consideration. On
December 9, 2020, we effected a share split with respect to the Class B ordinary
shares, resulting in an aggregate of 8,625,000 Class B ordinary shares
outstanding. All shares and associated amounts have been retroactively restated
to reflect the share surrender and the share split. The holders of the Founder
Shares agreed to forfeit up to an aggregate of 1,125,000 Founder Shares, on a
pro rata basis, to the extent that the option to purchase additional units was
not exercised in full by the underwriters, so that the Founder Shares would
represent 20% of our issued and outstanding shares after our Initial Public
Offering. The underwriters exercised their over-allotment option in full on
December 14, 2020; thus, the 1,125,000 Founder Shares are no longer subject to
forfeiture.
Our Initial Shareholders agreed not to transfer, assign or sell any of their
Founder Shares until the earlier to occur of (i) one year after the completion
of our Business Combination; and (ii) subsequent to our Business Combination
(x) if the last reported sale price of Class A ordinary shares equals or exceeds
$12.00 per share (as adjusted for share
sub-divisions,
share dividends, rights issuances, consolidations, reorganizations,
recapitalizations and the like) for any 20 trading days within any
30-trading
day period commencing at least 150 days after our Business Combination or
(y) the date on which we complete a liquidation, merger, amalgamation, share
exchange, reorganization or other similar transaction that results in all of the
Public Shareholders having the right to exchange their ordinary shares for cash,
securities or other property.

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Related Party Reimbursements and Loans
Our Sponsor agreed to loan us up to $300,000 to be used for the payment of costs
related to our Initial Public Offering pursuant to a promissory note (the
"Note"). The Note is
non-interest
bearing, unsecured and due upon the closing of our Initial Public Offering. As
of June 30, 2021 and December 31, 2020, there were no amounts outstanding
related to the Note.
In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor, members of our founding team or any of our affiliates
may, but are not obligated to, loan us funds as may be required ("Working
Capital Loans"). If we complete a Business Combination, we would repay the
Working Capital Loans out of the proceeds of the Trust Account released to us.
Otherwise, the Working Capital Loans would be repaid only out of funds held
outside the Trust Account. In the event that a Business Combination does not
close, we may use a portion of proceeds held outside the Trust Account to repay
the Working Capital Loans but no proceeds held in the Trust Account would be
used to repay the Working Capital Loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at
the lenders' discretion, up to $1,500,000 of such Working Capital Loans may be
convertible into warrants of the post-Business Combination entity at a price of
$1.50 per warrant. The warrants would be identical to the Private Placement
Warrants. Except for the foregoing, the terms of such Working Capital Loans, if
any, have not been determined and no written agreements exist with respect to
such loans. To date, we have no borrowings under the Working Capital Loans.
Administrative Services Agreement
We agreed to pay an affiliate of the Sponsor a total of $40,000 per month for
office space, administrative and support services (including salaries). Upon
completion of the Business Combination or the our liquidation, we will cease
paying these monthly fees. We incurred $120,000 and $240,000 in expenses in
connection with such services during the three and six months ended June 30,
2021, respectively, as reflected in the accompanying statements of operations.
As of June 30, 2021 and December 31, 2020, we had $18,000 in accrued
expenses-related-party in connection with such services.
Off-Balance
Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of June 30, 2021 and December 31, 2020, we did not have any
off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation
S-K
and did not have any commitments or contractual obligations other than
obligations disclosed herein.
Contractual Obligations
Underwriting Agreement
We granted the underwriters a
45-day
option from the date of the Initial Public Offering to purchase up to 4,500,000
additional Units at our Initial Public Offering price less the underwriting
discounts and commissions. The underwriters exercised their over-allotment
option in full on December 14, 2020.
The underwriters were entitled to an underwriting discount of $0.20 per unit, or
$6.9 million in the aggregate, paid upon the closing of our Initial Public
Offering. In addition, $0.35 per unit, or approximately $12.1 million in the
aggregate will be payable to the underwriters for deferred underwriting
commissions. The deferred fee will become payable to the underwriters from the
amounts held in the Trust Account solely in the event that we complete a
Business Combination, subject to the terms of the underwriting agreement.
Administrative Services Agreement
Commencing on the effective date of our Initial Public Offering, we agreed to
pay an affiliate of our Sponsor a total of $40,000 per month for office space,
administrative and support services (including salaries). Upon completion of our
Business Combination or our liquidation, we will cease paying these monthly
fees.
Critical Accounting Policies and Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with U.S. GAAP. The preparation of our financial statements requires
us to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses and the disclosure of contingent assets and
liabilities in our financial statements. On an ongoing basis, we evaluate our
estimates and judgments, including those related to fair value of financial
instruments and accrued expenses. We base our estimates on historical
experience, known trends and events and

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various other factors that we believe to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions. The company has identified the following as its
critical accounting policies:
Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market or
foreign currency risks. We evaluate all of our financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to FASB ASC
Topic 480 "Distinguishing Liabilities from Equity" and FASB ASC Topic 815,
"Derivatives and Hedging" ("ASC 815"). The classification of derivative
instruments, including whether such instruments should be recorded as
liabilities or as equity, is
re-assessed
at the end of each reporting period.
The warrants issued in the Initial Public Offering and the Private Placement
Warrants are recognized as derivative liabilities in accordance with ASC 815.
Accordingly, we recognize the warrant instruments as liabilities at fair value
and adjust the instruments to fair value at each reporting period. The
liabilities are subject to remeasurement at each balance sheet date until
exercised, and any change in fair value is recognized in the Company's
statements of operations. The fair value of the Public Warrants issued in
connection with the Initial Public Offering and Private Placement Warrants were
initially measured at fair value using a Monte Carlo simulation model and
subsequently, the fair value of the Public and Private Placement Warrants has
been based on public market quoted prices which was $1.67 at June 30, 2021. The
fair value of Warrants issued in connection with our Initial Public Offering
have subsequently been measured based on the listed market price of such
warrants.
Investments Held in Trust Account
The Company's portfolio of investments is comprised solely of U.S. government
securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act, with a maturity of 185 days or less, or investments in money market
funds that invest in U.S. government securities, or a combination thereof. The
Company's investments held in the Trust Account are classified as trading
securities. Trading securities are presented on the balance sheet at fair value
at the end of each reporting period. Gains and losses resulting from the change
in fair value of these securities is included in net gain on investments held in
Trust Account in the accompanying statements of operations. The estimated fair
values of investments held in the Trust Account are determined using available
market information, other than for investments in open-ended money market funds
with published daily net asset values ("NAV"), in which case the Company uses
NAV as a practical expedient to fair value. The NAV on these investments is
typically held constant at $1.00 per unit.
Fair Value of Financial Instruments
Fair value measurements are based on the premise that fair value is an exit
price representing the amount that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants. As
such, fair value is a market-based measurement that should be determined based
on assumptions that market participants would use in pricing an asset or
liability. As a basis for considering such assumptions, the following three-tier
fair value hierarchy has been used in determining the inputs used in measuring
fair value:

Level 1   -   Quoted prices in active markets for identical assets or liabilities on
              the reporting date.

Level 2   -   Pricing inputs are based on quoted prices for similar instruments in
              active markets, quoted prices for identical or similar instruments in
              markets that are not active and model-based valuation techniques for
              which all significant assumptions are observable in the market or can be
              corroborated by observable market data for substantially the full term
              of the assets or liabilities.

Level 3   -   Pricing inputs are generally unobservable and include situations where
              there is little, if any, market activity for the investment. The inputs
              into the determination of fair value require management's judgment or
              estimation of assumptions that market participants would use in pricing
              the assets or liabilities. The fair values are therefore determined
              using factors that involve considerable judgment and interpretations,
              including, but not limited to, private and public comparables,
              third-party appraisals, discounted cash flow models, and fund manager
              estimates.

As of December 31, 2020, the recorded values of cash and cash held in the Trust Account, prepaid expenses, accounts payable, accrued expenses and accrued expenses - related party approximate the fair values due to the short-term nature of the instruments.



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Class A ordinary shares Subject to Possible Redemption
Class A ordinary shares subject to mandatory redemption (if any) are classified
as liability instruments and are measured at fair value. Conditionally
redeemable Class A ordinary shares (including Class A ordinary shares that
feature redemption rights that are either within the control of the holder or
subject to redemption upon the occurrence of uncertain events not solely within
the Company's control) are classified as temporary equity. At all other times,
Class A ordinary shares are classified as shareholders' equity. Our Class A
ordinary shares feature certain redemption rights that are considered to be
outside of our control and subject to the occurrence of uncertain future events.
Accordingly, at June 30, 2021 and December 31, 2020, 29,789,448 and 29,874,959,
respectively Class A ordinary shares subject to possible redemption are
presented as temporary equity, outside of the shareholders' equity section of
the Company's balance sheet.
Net Earnings (Loss) Per Ordinary Share
Net income (loss) per share is computed by dividing net income by the
weighted-average number of ordinary shares outstanding during the period. We
have not considered the effect of the warrants sold in the Public Offering and
Private Placement to purchase an aggregate of 18,526,807 shares in the
calculation of diluted loss per share, since the exercise of the warrants are
contingent upon the occurrence of future events and the inclusion of such
warrants would be anti-dilutive.
Our statements of operations includes a presentation of earnings (loss) per
share for Redeemable Class A ordinary shares in a manner similar to the
two-class
method of earnings (loss) per share. Net income per common share, basic and
diluted, for Redeemable Class A ordinary shares is calculated by dividing the
proportionate share of earnings or loss on marketable securities held by the
Trust Account, net of applicable franchise and income taxes, by the weighted
average number of ordinary shares subject to possible redemption outstanding
since original issuance.
Net income or loss per share, basic and diluted, for
Non-Redeemable
Class A and Class B ordinary shares is calculated by dividing the net income or
loss, adjusted for income or loss on marketable securities attributable to
Redeemable Class A ordinary shares, by the weighted average number of
non-redeemable
ordinary shares outstanding for the period.
Non-Redeemable
Class A and Class B ordinary shares includes Founder Shares and
non-redeemable
ordinary shares as these shares do not have any redemption features.
Non-Redeemable
Class A and Class B ordinary shares participates in the income or loss on
marketable securities based on
non-redeemable
ordinary shares' proportionate interest.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. Section 102(b)(1) of the JOBS Act exempts emerging
growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a
Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the
new or revised financial accounting standards. The JOBS Act provides that a
company can elect to opt out of the extended transition period and comply with
the requirements that apply to
non-emerging
growth companies but any such an election to opt out is irrevocable. We have
elected to irrevocably opt out of such extended transition period, which means
that when a standard is issued or revised and it has different application dates
for public or private companies, we will adopt the new or revised standard at
the time public companies adopt the new or revised standard. This may make
comparison of our financial statements with another emerging growth company that
has not opted out of using the extended transition period difficult or
impossible because of the potential differences in accountant standards used.
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 CEO's compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our initial public offering or until we are no
longer an "emerging growth company," whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule
12b-2
of the Exchange Act and are not required to provide the information otherwise
required under this item.

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