# U.S. GoldMining Inc. (USGO) FY 2023 MD&A

Verbatim Item 7 Management's Discussion and Analysis from U.S. GoldMining Inc.'s 10-K for fiscal year 2023.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1947244/000149315224007434/form10-k.htm
Accession: 0001493152-24-007434
Filing date: 2024-02-21
Report date: 2023-11-30
Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub.
Confidence: high

Company profile: /company/USGO/
All MD&A years: /company/USGO/mda/
Next year: /company/USGO/mda/fy2024/ (FY 2024)

Overview

We
are a United States domiciled exploration stage company and our sole project is currently the Whistler Project. The Whistler Project
is a gold-copper exploration project located in the Yentna Mining District, approximately 170 km northwest of Anchorage, in Alaska.

We
were incorporated on June 30, 2015, in Alaska as “BRI Alaska Corp.” On September 8, 2022, we redomiciled to Nevada and changed
our name to “U.S. GoldMining Inc.”.We are a subsidiary of GoldMining, a company organized under the laws of Canada and listed
on the Toronto Stock Exchange and NYSE American. GoldMining is a public mineral exploration company that was incorporated in 2009 and
is focused on the acquisition and development of gold assets in the Americas. Our principal executive offices are located at 1188 West
Georgia Street, Suite 1830, Vancouver, British Columbia, Canada V6E 4A2 and our head operating offices are located at 301 Calista Court,
Suite 200, Office 203, Anchorage, Alaska, 99518. Our website address is www.usgoldmining.us. Our shares of Common Stock and warrants
to purchase shares of Common Stock (the “Warrants”) are listed on the Nasdaq Capital Market under the symbols “USGO”
and “USGOW”, respectively.

On
April 24, 2023, in connection with the closing of our initial public offering (the “IPO”), we issued 2,000,000 units
(the “Units”), with each Unit consisting of (i) one share of Common Stock and (ii) one Warrant at a price of $10.00
per Unit for gross proceeds of $20,000,000. Each Warrant entitles the holder thereof to acquire one share of Common Stock at an exercise
price of $13.00 per share for a period of three years from the issue date. In connection with the IPO, we incurred securities issuance
costs of $970,194, of which $650,000 represented cash fees paid to the underwriters. After the IPO, GoldMining continued to own a controlling
interest in us of 9,622,491 shares of Common Stock and Warrants to purchase up to 122,490 shares of Common Stock, representing approximately
79.3% of our outstanding shares of Common Stock. As of November 30, 2023, GoldMining owned 79.7%.

On
February 9, 2024, the board of directors approved a change of our fiscal year end from November 30 to December 31, effective
beginning with the next fiscal year, which began on January 1, 2024, and will end on December 31, 2024 (the “Fiscal
2024”). As a result of the change in fiscal year, there was a one-month transition period beginning on December 1, 2023,
and ending on December 31, 2023, the results of which are expected to be reported in the Quarterly Report on Form 10-Q to be filed
for the first quarter of Fiscal 2024 and in the Annual Report on Form 10-K to be filed for Fiscal 2024.

In
2023 we also commenced our initial confirmatory work program at our 100% owned Whistler Project. Subsequent to the year end, we announced
initial results from such program.

33

Results
of Operations

Until
the completion of the IPO, we operated as a wholly-owned subsidiary of GoldMining. Accordingly, the financial statements for the year
ended November 30, 2022, were prepared on a “carve-out” basis to include allocations of certain assets, liabilities and expenses
related to services and support functions from GoldMining, which were allocated on a pro-rata basis considered by GoldMining to be a
reasonable reflection of the utilization of services provided to us for the related years presented. Management believes the assumptions
and allocations underlying the financial statements are reasonable and appropriate under the circumstances. However, these financial
statements are not necessarily indicative of the results that would be attained if we had operated as a separate legal entity
during the periods presented and are not necessarily indicative of future operating results.

Fiscal
Year Ended November 30, 2023, Compared to Fiscal Year Ended November 30, 2022

For
the fiscal year ended November 30, 2023, we recorded a net loss of $9,356,577 ($0.82 per share) compared to a net loss of $1,738,657
($0.17 per share) for the fiscal year ended November 30, 2022. The $7,617,920 increase in net loss was primarily due to increased filing,
listing, legal, accounting, and investor relations expenditures for the preparation and execution of our IPO and costs
associated with the Whistler Project exploration program.

Exploration
Expenses

For
the fiscal year ended November 30, 2023, we had exploration expenses of $5,054,500, compared to $543,322 for the fiscal year
ended November 30, 2022. The $4,511,178 increase is primarily related to our confirmatory work program conducted in 2023 which included
drilling, consulting fees to vendors that provided geological and environmental work, regulatory and community stakeholder engagements
and other technical services, and maintenance costs.

Drilling
Expenses

For
the fiscal year ended November 30, 2023, drilling expenses relating to our confirmatory drilling work in 2023 were $1,694,952 compared
to $0 for the fiscal year ended November 30, 2022.

Consulting
Fees

For
the fiscal year ended November 30, 2023, exploration expenses included consulting fees of $1,499,000, compared to $256,275 for the fiscal
year ended November 30, 2022. The increase of $1,242,725 was primarily related to consulting fees for the management of the confirmatory
work program at the Whistler Project, overhead costs for work on the renovation of the existing Whistler Project camp, and initiation
of regulator, community and other stakeholder engagements.

Land
Fee, Camp Maintenance Expenses

For
the fiscal year ended November 30, 2023, land fee and camp maintenance expenses were $945,751 compared to $254,910 for the fiscal
year ended November 30, 2022. The increase was primarily for the increase of camp costs, including equipment maintenance, camp
management labor and supplies for the ongoing exploration program, freight and sampling, as well as work related to a road access
study.

Transportation
and Travel Expenses

For
the fiscal year ended November 30, 2023, transportation and travel expenses were $547,942 compared to $29,887 for the fiscal year ended
November 30, 2022. The increase of $518,055 was mainly related to aircraft charter costs to bring crews, equipment and camp supplies
to the Whistler Project site in connection with the ongoing exploration program, including mobilization of drilling equipment and major
consumables.

34

Other
Exploration Expenses

For the fiscal year ended November 30, 2023, other exploration expenses were $366,855 compared to $2,250 for the fiscal year ended
November 30, 2022. The increase of $364,605 primarily consisted of equipment rental and fuel consumption for the ongoing exploration
program.

General
and Administrative Expenses

For
the fiscal year ended November 30, 2023, general and administrative expenditures were $4,670,248, compared to $1,172,810 for the year
ended November 30, 2022. During the year ended November 30, 2023, general and administrative expenditures primarily consisted of professional
fees of $1,665,183, compared to $883,664 during the year ended November 30, 2022. The increase in such expenses was primarily as a result
of increased legal, audit, accounting and tax services relating to our IPO. General and administrative expenditures also
included: (i) share-based compensation expenses of $423,831, which consisted of $48,756 related to the award of restricted shares vested
during the year, $255,027 related to the fair value of stock options issued by us to management, directors and employees, $65,700 related to share compensation for consulting services, and $54,348 for GoldMining personnel, allocated for their
time spent on our affairs, compared to $65,303 during the year ended November 30, 2022; (ii) management fees, salaries and benefits of
$300,767, compared to $157,925 during the year ended November 30, 2022; (iii) consulting, corporate development and investor relations
expenses of $1,742,904 compared to $24,170 during the year ended November 30, 2022. The increase was mainly for building corporate brand
awareness after completion of the IPO; (iv) filing, listing, dues and subscriptions expenses of $178,595, compared to $10,882 during
the year ended November 30, 2022; (v) office administrative, rental and insurance expenses of $325,551, compared to $13,909 during the
year ended November 30, 2022; and (vi) travel, website design and hosting expenses of $33,417, compared to $16,957 during the year ended
November 30, 2022. The increase in general and administrative costs was primarily the result of a higher level of activity leading up
to and after our IPO.

Accretion
and Depreciation Expenses

For
the fiscal year ended November 30, 2023, accretion expenses for the asset retirement obligations were $21,051 compared to $19,255
for the fiscal year ended November 30, 2022.

For
the fiscal year ended November 30, 2023, depreciation expenses were $30,959 compared to $0 for the fiscal year ended November 30,
2022. The increase was primarily due to depreciation of the camp structures and equipment acquired during this year.

Loss
from Operations

For
the fiscal year ended November 30, 2023, our loss from operations was $9,776,758 compared to $1,735,387 for the year ended November
30, 2022. The increase of $8,041,371 in operating loss was primarily the result of an increase in general and administrative
expenses and exploration expenses after we completed our IPO and commenced our initial confirmatory work program at the Whistler
Project.

Our
operational costs, including, without limitation, labor costs, can be impacted by inflation. It is possible that in the future, high
inflation in the countries in which we operate may result in an increase in operational costs in local currencies, which could have a
significant effect on our operating cash flow.

35

Liquidity
and Capital Resources

[[GREPCENT_TABLE]]
[["","","As at November 30, 2023","","","As at November 30, 2022"],["","","($)","","","($)"],["Cash and cash equivalents","","$","11,401,338","","","$","54,508"],["Working capital (deficit)(1)","","","11,493,428","","","","(1,057,400",")"],["Total assets","","","13,023,753","","","","229,619"],["Total current liabilities","","","513,075","","","","1,287,019"],["Accounts payable","","","197,978","","","","466,127"],["Accrued liabilities","","","112,048","","","","26,922"],["Total non-current liabilities","","","297,967","","","","225,871"],["Stockholders\u2019 equity (deficit)","","","12,212,711","","","","(1,283,271",")"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","Working capital (deficit) is the difference between the total current assets and total current liabilities."]]
[[/GREPCENT_TABLE]]

Prior
to the completion of our IPO, capital resources consisted primarily of cash advanced and/or contributed from GoldMining. On April 24,
2023, we completed our IPO and issued 2,000,000 Units at a price of $10.00 per Unit for net proceeds in an aggregate amount of approximately
$19.1 million after deducting underwriting fees and offering costs. In May 2023, we repaid GoldMining $1,680,925, for amounts previously
advanced to us by GoldMining.

As of November 30, 2023, we had cash and cash equivalents of $11,401,338,
compared to $54,508 as of November 30, 2022, and restricted cash of $86,870, compared to $0 as of November 30, 2022. As of November 30,
2023, we had other receivables of $115,113, compared to $68,000 as of November 30, 2022. The increase in other receivables was mainly
due to interest receivable on term deposits held by us. As of November 30, 2023, we had inventories of $27,249, compared to $0 as of November
30, 2022, which included fuels held at the Whistler Project camp site. As of November 30, 2023, we had prepaid expenses and deferred costs
of $375,933, compared to $107,111 as of November 30, 2022. The increase primarily consisted of a $172,566 increase in prepaid corporate
development expenses, $179,014 increase in prepaid insurance costs and $12,174 increase in prepaid dues and subscriptions costs for activities
after completion of the IPO, and offset $94,932 deferred financing costs as at November 30, 2022, which were reallocated to share issuance
costs upon completion of the IPO.

As
of November 30, 2023, current liabilities were $513,075, compared to $1,287,019 as of November 30, 2022. Current liabilities as of November
30, 2023, primarily consisted of: accounts payable of $197,978, compared to $466,127 as of November 30, 2022; accrued liabilities of $112,048,
compared to $26,922 as of November 30, 2022; withholdings taxes payable of $180,863, compared to $116,187 as of November 30, 2022. The
decreases in current liabilities were primarily related to the repayment of advances from GoldMining.

We
have not generated any revenue from operations and the only sources of financing to date have been through advances from GoldMining and
the IPO. Our ability to meet our obligations and finance exploration activities depends on our ability to generate cash flow through
the issuance of shares of common stock pursuant to private placements and short-term or long-term loans. Capital markets may not be receptive
to offerings of new equity from treasury or debt, whether by way of private placements or public offerings. This may be further complicated
by the limited liquidity for our Common Stock, restricting access to some institutional investors. Our growth and success is dependent
on external sources of financing which may not be available on acceptable terms, or at all.

We believe that the existing cash on hand will enable us to meet our working capital requirements for the next twelve months commencing
from the date that the consolidated financial statements are issued.

As
of November 30, 2023, we did not have any off-balance sheet arrangements.

36

Summary
of Cash Flows

Operating
Activities

For the fiscal year ended November 30, 2023, net cash used in operating activities was $9,428,815, compared to $1,322,149
for the fiscal year ended November 30, 2022. Significant operating expenditures for the fiscal year ended November 30, 2023, included
general and administrative expenses and exploration expenditures as we commenced our initial programs at the Whistler Project. The increase
of net cash used in operating activities is primarily the result of increased filing, listing, legal, accounting, and investor relations
expenditures for the preparation and execution of our IPO and costs associated with the Whistler Project exploration program.

Investing
Activities

For the fiscal year ended November 30, 2023, net cash used in investing
activities was $979,523, compared to $0 for the fiscal year ended November 30, 2022, of which, $866,140 related to the renovation of existing
camp structures and construction of additional facilities for the Whistler Project, and $113,383 related to the purchase of equipment.

Financing
Activities

For
the fiscal year ended November 30, 2023, net cash provided by financing activities was $21,842,038, which was primarily comprised of
the net proceeds of $19,056,223 from the IPO, proceeds received from warrant exercises of $3,363,204, capital contribution from GoldMining
of $46,459, withholding taxes received on return of capital of $53,935, advances from GoldMining of $1,003,142, offset by $1,680,925
for repayment of advances from GoldMining. Net cash provided by financing activities during the year ended November 30, 2022, was $1,371,027,
primarily from proceeds received from the settlement of a funding commitment of $1,158,143, advances from GoldMining of $183,302, and
capital contributions from GoldMining of $87,284, offset by $57,702 withholding taxes paid on return of capital.

Commitments
Required to Keep Whistler Project in Good Standing

For the fiscal year ended November 30, 2023, we made annual land payments in the amount of $224,583. We are required
to make annual land payments to the ADNR in the amount of $230,605 in 2024 and thereafter, to keep the Whistler Project in good standing.
Additionally, we have an annual labor requirement of $135,200 for 2024 and thereafter, for which a cash-in-lieu payment equal to the value
of the annual labor requirement may be made instead. We have excess labor carry forwards of $167,674 expiring in 2026 and $1,766,156 expiring
in 2027, of which up to $135,200 can be applied each year to meet our annual labor requirements. The Whistler Project is in good standing
as of the date of this Annual Report.

Future
Commitments

On November 27, 2020, GoldMining agreed to cause us to issue a 1.0% net
smelter return (“NSR”) royalty on our Whistler Project to Gold Royalty Corp. (“GRC”). We also assigned certain
buyback rights relating to an existing third party royalty on the Whistler Project such that GRC has a right to acquire a 0.75% NSR (including
an area of interest) on the Whistler Project for $5,000,000 pursuant to such buyback rights.

We acquired rights to the Whistler Project and associated equipment in
August 2015 pursuant to an asset purchase agreement by and among us, GoldMining, Kiska and Geoinformatics. Pursuant to such agreement,
we assumed an obligation on the Whistler Project pursuant to a royalty purchase agreement between Kiska, Geoinformatics, and MF2, dated
December 16, 2014. This agreement granted MF2 a 2.75% NSR royalty over all 304 claims, and, extending outside the current claims, over
an area of interest defined by the maximum historical extent of claims held on the Whistler Project.

In June 2023, we entered into an agreement with Equity Geoscience, Ltd.
for the management of an exploration program for the Whistler Project. The agreement includes an approved work order totaling $5,255,500,
for the period of June 1, 2023, to February 29, 2024, which may be paused, postponed or terminated by either party with 30 days written
notice. As at November 30, 2023, we have paid $5,066,720 towards the approved work order.

37

Transactions
with Related Parties

During
the years presented, we shared personnel, including key management personnel, office space, equipment, and various administrative
services with other companies, including GoldMining which owns approximately 79.7% of our outstanding shares of our Common Stock and
have common members of management and a director. Costs incurred by GoldMining were allocated between its related subsidiaries based
on an estimate of time incurred and use of services and are charged at cost. During the years ended November 30, 2023, and 2022, the
allocated costs from GoldMining to us were $100,807 and $147,349, respectively. Out of the allocated costs, $54,348 and $60,065 for
the years ended November 30, 2023, and 2022, respectively, were noncash share-based compensation costs. The allocated costs from
GoldMining were treated as a capital contribution, as there is no obligation or intent regarding the repayment of such amounts by
us.

For
the year ended November 30, 2023, the amounts advanced to us and paid on our behalf by GoldMining totaled $1,003,142. In May 2023, we
repaid GoldMining $1,680,925, for amounts previously advanced to us. The amount paid represented the full amount of the outstanding loan
from GoldMining at the time. For the year ended November 30, 2022, repayable amounts advanced to us and paid on our behalf by GoldMining
totaled $1,341,445, of which $1,158,143 was settled against a funding commitment. As at November 30, 2023, the loan payable to GoldMining
Inc. was $0 ($677,783 as at November 30, 2022).

For
the year ended November 30, 2022, we declared a return of capital to GoldMining of $1,096,343, which resulted in federal withholding
taxes payable of $173,889, of which $57,702 was paid during the year ended November 30, 2022. Pursuant to the return of capital, a note
payable was issued to GoldMining in the amount of $1,096,343, which was subsequently retired as a part of the settlement of the remaining
funding commitment to us in the amount of $2,254,486, which included the settlement of amounts previously advanced by GoldMining to us
in the amount of $1,158,143.

During
the year ended November 30, 2023, our board of directors approved a service agreement with Blender Media Inc. (“Blender”),
a company controlled by a direct family member of the co-chairman and a director of GoldMining. During the years ended November 30, 2023,
and 2022, we incurred $233,978 and $16,957, respectively, in general and administrative costs, paid to Blender for various services,
including information technology, corporate branding, advertising, media, website design, maintenance and hosting, provided by Blender
to us and are within industry standards. As at November 30, 2023, prepaid expenses and deferred costs included service fees prepaid to
Blender in the amount of $169,899 (November 30, 2022: $0).

During
the years ended November 30, 2023, and 2022, share-based compensation costs included $31,127 and $3,516, respectively, in amounts incurred
for the co-chairman and a director of GoldMining for performance based Restricted Shares granted in September 2022.

GoldMining
acquired 122,490 Units in the IPO at a price of $10 per Unit for a total consideration of $1,224,900. Certain directors and officers
of GoldMining also participated in the IPO.

Related
party transactions are based on the amounts agreed to by the parties. During the years ended November 30, 2023, and 2022, we did not
enter into any contracts or undertake any commitment or obligation with any related parties other than as described herein.

Outstanding
Securities

As
of the date hereof, we have 12,398,709 shares of Common Stock outstanding. In addition, we had stock options outstanding representing
82,500 shares at an exercise price of $10 per share, and outstanding Warrants to purchase 1,741,292 shares at an exercise price of $13
per share. The exercise of stock options and Warrants is at the discretion of their respective holders and, accordingly, there is no
assurance that any of the stock options or warrants will be exercised in the future.

38

Critical
Accounting Estimates and Judgments

The
preparation of these financial statements in conformity with U.S. GAAP requires management to make judgments and estimates and form assumptions
that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of income and
expenses during the year. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities, income
and expenses. Management uses historical experience and various other factors it believes to be reasonable under the given circumstances
as the basis for its judgments and estimates. Actual outcomes may differ from these estimates under different assumptions and conditions.

Information
about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial
statements is as follows:

Asset
retirement obligation

An
asset retirement obligation (“ARO”) represents the present value of estimated future costs for the rehabilitation
of our mineral property. These estimates include assumptions as to the future activities, cost of services, timing of the rehabilitation
work to be performed, inflation rates, exchange rates and interest rates. The actual cost to rehabilitate a mineral property may vary
from the estimated amounts because there are uncertainties in factors used to estimate the cost and potential changes in regulations
or laws governing the rehabilitation of a mineral property. Management periodically reviews the rehabilitation requirements and adjusts
the liability as new information becomes available and will assess the impact of new regulations and laws as they are enacted.

During the fiscal year ended November 30, 2023, the ARO for the Whistler
Project was revised due to changes in the estimated timing of reclamation activities and updated assumptions regarding reclamation costs.
The estimated future costs for the rehabilitation activities were updated for camp structures due to additional facilities constructed
during the year and for the exploration and evaluation assets due to surface disturbance resulting from past exploration programs. The
life expectancy of the ARO was extended to 10 years. We recorded a change in estimate to the ARO of $67,042, resulting in the corresponding
camp structures being decreased by $98,434, and the exploration and evaluation assets being increased by $31,392, respectively.

Allocation
of expenses from GoldMining.

For
the year ended November 30, 2023, certain general administrative expenses, including employment related expenditures for services and
support functions provided by GoldMining, were allocated on a pro-rata basis considered by GoldMining to be a reasonable reflection of
the utilization of services provided to us.

Allocation
of carve-out expenses from GoldMining.

The financial statements as of November 30, 2022, have been prepared on
a “carve-out” basis to include allocations of certain assets, liabilities and expenses related to services and support functions
from GoldMining, which were allocated on a pro-rata basis considered by GoldMining to be a reasonable reflection of the utilization of
services provided to us for the quarters presented. These expenses, assets, and liabilities have been allocated to us on the basis of
direct usage when identifiable, with others allocated based on relevant data criteria as follows:

[[GREPCENT_TABLE]]
[["","\u25cf","General and administrative expenses- allocated all direct expenses and corporate expenses were allocated based on an estimate of time incurred to reflect the utilization of those services by us including:"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cb","Office space, equipment and administrative services."],["","\u25cb","Employment related expenses, including share-based compensation which was calculated using the Black-Scholes model."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Accounts payable and accrued expenses, prepaid expenses and deposits, due to GoldMining, allocated all amounts directly related to us."]]
[[/GREPCENT_TABLE]]

Management
believes the assumptions and allocations underlying the financial statements are reasonable and appropriate under the circumstances.
Therefore, these financial statements are not necessarily indicative of the results that would be attained if we had operated as a separate
legal entity during the periods presented and are not necessarily indicative of future operating results.

39

Restricted
Shares

The
fair value of the restricted shares is measured at grant date and recognized over the period during which the restricted shares
vest. When restricted shares are conditional upon the achievement of a performance condition, we estimate the length of the expected
vesting period at grant date, based on the most likely outcome of the performance condition. The fair value of the restricted shares
is determined based on the fair value of the shares of Common Stock on the grant date, adjusted for lack of marketability discount,
minority shareholder discount, and other applicable factors that are generally recognized by market participants.

Stock
Options

We grant stock options to certain of our directors, officers, employees and consultants. We use the Black-Scholes
option-pricing model to determine the grant date fair value of stock options. The fair value of stock options granted to employees is
recognized as an expense over the vesting period with a corresponding increase in equity. An individual is classified as an employee when
the individual is an employee for legal or tax purposes, provides services that could be provided by a direct employee, or has authority
and responsibility for planning, directing and controlling our activities, including non-executive directors. The fair value is measured
at grant date and recognized over the period during which the options vest. Forfeitures are accounted for as they occur.

The
Black-Scholes option-pricing model uses as inputs the fair value of our shares of Common Stock and assumptions we make for the volatility
of our shares of Common Stock, the expected term of our stock options, the risk-free interest rate for a period that approximates the
expected term of our stock options and our expected dividend yield. We have historically been a private company and continue to lack
sufficient company-specific historical and implied volatility information. Therefore, we estimate our expected share volatility based
on the historical volatility of a publicly traded set of peer companies and expect to continue to do so until such time as we have adequate
historical data regarding the volatility of our own traded share price.

Recently
Issued Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic
740) Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which is intended to simplify various aspects
related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies
and amends existing guidance to improve consistent application. The new standard is effective for the fiscal years beginning after December
15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Management has assessed and concluded there is no
material impact on our financial statements.

In November 2023, the FASB issued ASU 2023-07, the amendments “improve reportable segment disclosure requirements,
primarily through enhanced disclosures about significant segment expenses”. In addition, the amendments enhance interim disclosure
requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure
requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is
to enable “investors to better understand an entity’s overall performance” and assess “potential future cash flows.”
The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods
within fiscal years beginning after December 15, 2024. Management is currently evaluating the impact of this guidance on our financial
statements. 

JOBS
Act

In
April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage
of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to
private companies.

We
continue the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act.
Subject to certain conditions, as an emerging growth company, we may rely on certain of these exemptions, including without limitation,
providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b)
of the Sarbanes-Oxley Act. We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year in which
we have total annual gross revenue of $1.235 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of
the date of the completion of our IPO; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the
previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

40