Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

You should read the following discussion together with our financial statements and the related notes included elsewhere in this annual report on Form 10-K. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements.

Overview

Webstar Technology Group, was incorporated in Wyoming on March 10, 2015. The Company was established for the operation of certain licensed and purchased software solutions. However, in June 2024 the new management team of Webstar Technology Group Inc. chose to expand the company's footprint into the commercial real estate development & acquisitions space.

Plan of Operations

Results of Operations for the years ended December 31, 2025 and 2024

The following discussion represents a comparison of our results of operations for the years ended December 31, 2025 and 2024. The results of operations for the periods shown in our audited condensed financial statements are not necessarily indicative of operating results for the entire period. In the opinion of management, the audited condensed financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state our financial position, results of operations and cash flows for the periods presented.

		Years Ended December 31,
		2025				2024
Net revenues		$	-			$	-
Cost of sales			-				-
Gross Profit			-				-
Operating expenses			495,831				398,058
Other expense			835,559				4,101,910
Net loss before income taxes		$	(1,331,390	)		$	(4,499,968	)

Net Revenues

For the years ended December 31, 2025 and 2024, we had no revenues.

Cost of Sales

For the years ended December 31, 2025 and 2024, we had no cost of sales as we had no revenues.

Operating expenses

Operating expenses increased by $97,773, or 24.6%, to $495,831 for year ended December 31, 2025 from $398,058 for the year ended December 31, 2024 primarily due to increases in consulting fees of $208,499, professional fees of $82,054, investor relations costs of $28,426, travel costs of $3,318, rent of $4,565, and general and administration costs of $8,977, offset partially by compensation costs of $238,066, as a result of adding administrative infrastructure for our anticipated business development. The decrease in compensation costs is primarily attributable to the decrease in salary and related expenses due to the Company's former CEO and CFO resigning effective June 14, 2024 and March 4, 2024, respectively, and not being replaced full time employees.

For the year ended December 31, 2025, we had general and administrative expenses of $495,831 primarily due to professional fees of $102,655, rent expense of $4,565, investor relations costs of $28,426, consulting fees of $342,660, travel costs of $8,318, and general and administration costs of $9,207, as a result of adding administrative infrastructure for our anticipated business development.

For the year ended December 31, 2024, we had general and administrative expenses of $398,058 primarily due to professional fees of $20,601, compensation costs of $238,066, consulting fees of $134,161, travel costs of $5,000, and general and administration costs of $230, as a result of adding administrative infrastructure for our anticipated business development.

Other Expense

Other expense for the year ended December 31, 2025 totaled $835,559 primarily due to interest expense - original issue discount of $649,366, interest expense - related party of $80,000, and interest expense of $114.899, compared to other expense of $4,101,910 for the year ended December 31, 2024 primarily due to loss on extinguishment of debt with a related party of $4,021,910 and interest expense - related party of $80,000.

Net loss before income taxes

Net loss before income taxes for the year ended December 31, 2025 totaled $1,331,390 primarily due to (increases/decreases) in professional fees, investor relations costs, consulting fees, travel, rent, and general and administration costs compared to a loss of $4,499,968 for the year ended December 31, 2024 primarily due to (increases/decreases) in professional fees, compensation costs, and consulting fees.

Assets and Liabilities

Assets were $37,985,344 as of December 31, 2025. Assets consisted primarily of cash of $4,271, project development - related expenses of $3,310,470, land and land acquisition - related expenses of $34,658,198 (consisting primary of land purchases), and prepaid expenses and other current assets of $12,405. Liabilities were $40,292,845 as of December 31, 2025. Liabilities consisted primarily of accounts payable of $294,323, accrued expenses of $303,341, due to related party of $142,874, short term notes payable of $205,880, promissory notes payable of $37,388,940, net of unamortized debt issuance costs of $135,983, liability for condominium of $584,918, less unamortized issuance costs of $735,082, convertible note payable - related party of $1,000,000, accrued interest of $113,026, accrued interest - related party of $135,358, long term notes payable of $100,000, and other current liabilities of $24,185.

Liquidity, Going Concern and Uncertainties

Going Concern

The accompanying condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $48,867,619 at December 31, 2025, had a working capital deficit of $1,622,583 and $1,081,236 at December 31, 2025 and 2024, respectively, had a net loss of $1,331,390 and $4,499,968 for the years ended December 31, 2025 and 2024, respectively, and net cash used in operating activities of $761,410 and $111,934 for the years ended December 31, 2025 and 2024, respectively, with no revenue earned since inception, and a lack of operational history. In addition, as of April 1, 2026, the Purchase Money Promissory Note for a principal amount of $33,700,000 and unpaid accrued interest matured and are in default. These matters raise substantial doubt about the Company's ability to continue as a going concern.

While the Company is attempting to expand operations and increase revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of a public offering or an asset sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy to generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect or on terms acceptable to the Company. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues.

The condensed financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

General - Overall, we had an increase in cash flows for the year ended December 31, 2025 of $4,251 resulting from cash provided by financing activities of $765,661, offset partially by cash used in operating activities of $761,410.

The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:

		Years Ended December 31,
		2025				2024
Net cash provided by (used in):
Operating activities		$	(761,410	)		$	(111,934	)
Investing activities			-				-
Financing activities			765,661				111,784
		$	4,251			$	(150	)

Cash Flows from Operating Activities - For the year ended December 31, 2025, net cash used in operations was $761,410 compared to net cash used in operations of $111,934 for the year ended December 31, 2024. Net cash used in operations was primarily due to a net loss of $1,331,390 for year ended December 31, 2025 and the changes in operating assets and liabilities of $70,886, primarily due to the changes in inventory of $37,968,668, deposits in conjunction with debt of $36,832,992, deposits in conjunction with accrued expense of $303,341, prepaid expenses and other current assets of $7,944, accounts payable of $289,294, accrued expenses - related party of $250,000, accrued interest of $113,026, accrued interest - related party of $80,000, and other current liabilities of $21,185. In addition, net cash used in operating activities includes adjustments to reconcile net profit from the accretion of original issuance costs of $640,866.

For the year ended December 31, 2024, net cash used in operations was primarily due to a net loss of $4,499,968 and the changes in operating assets and liabilities of $306,124, primarily due to the changes in accrued payroll of $243,066, accrued interest - related party of $80,000, and accounts payable of $2,909, offset partially by the change in prepaid expenses of $19,851. In addition, net cash used in operating activities includes adjustments to reconcile net profit from consulting services added to due to stockholder of $60,000, and the settlement of liabilities for common stock of $4,021,910.

Cash Flows from Investing Activities - For the years ended December 31, 2025 and 2024, the Company had no cash flows from investing activities.

Cash Flows from Financing Activities - For the year ended December 31, 2025, net cash provided by financing was $765,661, due to proceeds from long term notes payable of $100,0000, proceeds from short term convertible notes of $374,430, proceeds from short term loans payable of $512,500, capital contribution from shareholder of $125, offset partially by repayments of convertible notes of $60,550, repayments of promissory notes of $12,500, and repayments of advances from a related party of $148,344, compared to cash provided by financing activities of $111,784 for the year ended December 31, 2024 due to advances from stockholders of $70,566 and advances from a related party of $41,218.

Financing - We expect that our current working capital position, together with our expected future cash flows from operations will be insufficient to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements and other contractual obligations for at least the next twelve months. As stated above, Management intends to raise additional funds by way of a public offering or an asset sale transaction, however there can be no assurance that we will be successful in completing such transactions.

We have no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or technologies or any other material capital expenditures. However, we will continue to evaluate acquisitions of and/or investments in products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions and/or investments. We may not be able to obtain such financing on commercially reasonable terms, if at all. Due to the ongoing global economic crisis, we believe it may be difficult to obtain additional financing if needed. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.

Common Stock

During the year ended December 31, 2025, several convertible promissory notes totaling $105,000 were converted into 4,071,429 of the Company's common shares.

During the year ended December 31, 2025, a convertible promissory note totaling $3,000 was converted into 42,857 of the Company's common shares. To date, these shares have not been issued and therefore, are now in default. The Company is currently in the process of issuing these shares. Until such time as the shares are issued, the Company has presented these shares as common stock to be issued on under other current liabilities in the accompanying balance sheets.

On March 6, 2025, the Company cancelled 2,000,000 shares of the Company's common stock in conjunction with the Asset Purchase Agreement.

As of December 31, 2025, the Company has not issued a total of 42,857 common shares due to several third parties. These shares are reflected the weighted-average shares outstanding and are included in the Company's outstanding shares balance of 404,228,842.

Short Term Notes Payable

During the year ended December 31, 2025, the Company authorized convertible promissory notes bearing no interest and are due and payable on various dates in July and December 2026 for aggregate gross proceeds of $334,930 and had repayments totaling $60,550. The Notes allow for the Company to convert the outstanding principal amount into shares of the Company's common stock should the Securities and Exchange Commission grant approval of the Company's Regulation A Tier II offering of $7.00 per share. The holders of the Notes have the right, at the holder's option, to convert the principal amount of these notes, in whole or in part, into fully paid and nonassessable shares at a conversion price of between $0.025 and $0.08 per share into the Company's common stock before any public offering. The Notes include customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the holders of the Notes may be entitled to take various actions, which may include the acceleration of amounts due under the Notes. During the year ended December 31, 2025, several Notes were converted into 4,071,429 of the Company's common shares. The Company has a balance owed of $205,880 and $0 at December 31, 2025 and 2024, respectively.

In January 2026, the Company authorized convertible promissory notes bearing no interest and are due and payable on various dates in July 2026 and January 2027 for aggregate gross proceeds of $731,600. The Notes allow for the Company to convert the outstanding principal amount into shares of the Company's common stock should the Securities and Exchange Commission grant approval of the Company's Regulation A Tier II offering of $7.00 per share. The holders of the Notes have the right, at the holder's option, to convert the principal amount of these notes, in whole or in part, into fully paid and nonassessable shares at a conversion price of between $0.04 and $0.20 per share into the Company's common stock. The Notes include customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the Note holders may be entitled to take various actions, which may include the acceleration of amounts due under the Notes.

Due from Related Party

During the years ended December 31, 2025 and 2024, the Company received working capital advances of $3,000 and $0 and made repayments of $151,344 and $0, respectively, from an entity controlled by the Purchasers disclosed in Note 1. These advances have no specific repayment terms and do not bear interest. The Company has a balance due from related party of $107,126 and a balance owed to related party of $41,218 at December 31, 2025 and 2024, respectively, and these advances have been presented as advance from related party on the accompanying balance sheets.

Promissory Note Payable

Webstar

On July 22, 2025, the Company entered into a promissory note with a director of the Company for a principal amount of $12,500 ($10,000 cash was received) due September 30, 2025 which was issued at a $2,500 original issue discount from the face value of the promissory note. The Company recorded the original issue discount of $2,500 to interest expense - original issue discount in the Statements of Operations during the year ended December 31, 2025.

In June 2025, the Company entered into a promissory note with a director of the Company for a principal amount of $31,000 ($25,000 cash was received) due July 31, 2025 which was issued at a $6,000 original issue discount from the face value of the promissory note. In June and July 2025, the Company repaid the balance due on the promissory note of $31,000.

Forge Atlanta

During the year ended December 31, 2025, the Company entered into a promissory note with a third party of $3,000,000 and is non-interest bearing. The promissory note is due if Forge Atlanta does not acquire the land purchase as described in Note 1.

On December 17, 2025, the Company entered into a Commercial Purchase and Sale Agreement, as amended (the "Purchase and Sale Agreement") through its subsidiary Forge Atlanta (the "Purchaser"), with McCall Railroad, LLC ("MCRR" or the "Seller") for commercial properties designated as Land Lots 84 and 85 of the 14^th District, Fulton County, Georgia (the "Property") for a total purchase price of $34,500,000 (the "Acquisition"). The Acquisition is part of the Company's strategy to develop mixed-use commercial and residential complexes. The Company entered into two promissory notes with Seller as follows:

	1.	Purchase Money Promissory Note for a principal amount of $33,700,000. The note bears interest at a rate of 6% per annum and is due March 2, 2026. As long as the Company is not in default of this or any other note, the note may be extended to April 1, 2026 with an extension fee of $150,000. On February 17, 2026, the Company paid the extension fee of $150,000 to MCRR. On April 1, 2026, the Note matured. The Note and unpaid accrued interest are in default and now provide for interest to accrue at 12.5% per annum. The Company is currently in discussions to restructure the terms of the note. The current discussions also include extending the maturity date of the Note with MCRR to October 1, 2026 and an extension fee of $900,000 and interest totaling $1,011,000 to be repaid in each of six (6) installments of $318,500 ($168,500 applied to interest and $150,000 applied to the extension fee) due on April 15, 2026; April 30, 2026, May 30, 2026, June 30, 2026, July 30, 2026, and August 30, 2026.
	2.	Short Term Promissory Note for a principal amount of approximately $32,992 due December 29, 2025 and is non-interest bearing. The note is personally guaranteed by the Company's CEO. The note was repaid as of January 7, 2026.

On December 9, 2025, the Forge Atlanta entered into an investment agreement with a third party for a principal amount of $220,000 ($160,000 cash was received) due April 9, 2026 which was issued at a $60,000 original issue discount from the face value of the investment agreement. In addition, the note holder shall be entitled to receive one (1) one bedroom condominium unit in Phase 1 of the Forge Atlanta project, valued at $440,000 (based on the estimated cost of one (1) one bedroom condominium unit in Phase 1 of the Forge Atlanta project on the date of the note). Forge Atlanta recorded original issue discount accretion of $10,909 to interest expense - original issue discount in the Statements of Operations during the year ended December 31, 2025 and has an unamortized original issue discount of $49,091 as of December 31, 2025. The bedroom condominium unit in Phase 1 of the Forge Atlanta project on the date of grant of $440,000 was recorded as $440,000 to liability for condominium in the unaudited condensed consolidated Balance Sheets and was issued at a $440,000 original issue discount from the face value. Forge Atlanta recorded original issue discount accretion of $80,000 to interest expense - original issue discount in the Statements of Operations during the year ended December 31, 2025 and has an unamortized original issue discount of $360,000 as of December 31, 2025. In addition, the investment agreement provides the noteholder with 0.0292% equity in the Forge Atlanta project and a cash-settled right to receive 0.0292% of the net revenue generated by the Forge Atlanta project. The note includes customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the note holder may be entitled to take various actions, which may include the acceleration of amounts due under the note.

On December 4, 2025, the Forge Atlanta entered into an investment agreement with a third party for a principal amount of $341,931 ($240,000 cash was received) due June 4, 2026 which was issued at a $101,931 original issue discount from the face value of the investment agreement. In addition, the note holder shall be entitled to receive one (1) one bedroom condominium unit in Phase 1 of the Forge Atlanta project, valued at $440,000 (based on the estimated cost of one (1) one bedroom condominium unit in Phase 1 of the Forge Atlanta project on the date of the note). Forge Atlanta recorded original issue discount accretion of $15,039 to interest expense - original issue discount in the Statements of Operations during the year ended December 31, 2025 and has an unamortized original issue discount of $86,892 as of December 31, 2025. The bedroom condominium unit in Phase 1 of the Forge Atlanta project on the date of grant of $440,000 was recorded as $440,000 to liability for condominium in the unaudited condensed consolidated Balance Sheets and was issued at a $440,000 original issue discount from the face value. Forge Atlanta recorded original issue discount accretion of $64,918 to interest expense - original issue discount in the Statements of Operations during the year ended December 31, 2025 and has an unamortized original issue discount of $375,082 as of December 31, 2025. In addition, the investment agreement provides the noteholder with 0.034% equity in the Forge Atlanta project and a cash-settled right to receive 0.034% of the net revenue generated by the Forge Atlanta project. The note includes customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the note holder may be entitled to take various actions, which may include the acceleration of amounts due under the note.

On September 12, 2025, Forge Atlanta entered into an investment agreement with a third party for a principal amount of $100,000 due September 2027 and bearing interest at 12%. In addition, the investment agreement provides the noteholder with 0.00028% equity in the Forge Atlanta project.

On September 17, 2025, the Forge Atlanta entered into an investment agreement with a third party for a principal amount of $120,000 ($100,000 cash was received) due October 31, 2025 which was issued at a $20,000 original issue discount from the face value of the investment agreement. In addition, the note holder shall receive 300,000 common shares of Webstar, valued at $9,000 (based on the estimated fair value of the stock on the date of note) and is recorded as interest expense in the unaudited condensed consolidated Statements of Operations. Forge Atlanta recorded original issue discount accretion of $20,000 to interest expense - original issue discount in the Statements of Operations during the year ended December 31, 2025 and has an unamortized original issue discount of $0 as of December 31, 2025. The note was repaid as of January 7, 2026.

On September 19, 2025, the Forge Atlanta entered into an investment agreement with a third party for a principal amount of $110,000 ($100,000 cash was received) due November 30, 2025 which was issued at a $10,000 original issue discount from the face value of the investment agreement. In addition, the note holder shall be entitled to receive one (1) one bedroom condominium unit in Phase 1 of the Forge Atlanta project, valued at $440,000 (based on the estimated cost of one (1) one bedroom condominium unit in Phase 1 of the Forge Atlanta project on the date of the note). Forge Atlanta recorded original issue discount accretion of $10,000 to interest expense - original issue discount in the Statements of Operations during the year ended December 31, 2025 and has an unamortized original issue discount of $0 as of December 31, 2025. The bedroom condominium unit in Phase 1 of the Forge Atlanta project on the date of grant of $440,000 was recorded as $440,000 to liability for condominium in the unaudited condensed consolidated Balance Sheets and was issued at a $440,000 original issue discount from the face value. Forge Atlanta recorded original issue discount accretion of $440,000 to interest expense - original issue discount in the Statements of Operations during the year ended December 31, 2025 and has an unamortized original issue discount of $0 as of December 31, 2025. After the occurrence of a default as provided in the note, the noteholder shall retain the right to receive the condominium plus interest at 30% per annum on the note. The note was repaid as of January 7, 2026.

Generally, the Company's operations are subject to a number of factors that can affect its operating result and financial condition. Such factors include, but are not limited to, the results of our marketing efforts to promote users for our software solutions, successful launch and acceptance of our software solutions in the marketplace, competition of our software solutions, attraction of talented and skilled employees to support the business and the ability to raise capital to support its operations.

In order to continue as a going concern, we will need, among other things, additional capital resources. Management's plan is to obtain such resources for our capital needs by obtaining capital from management and significant stockholders sufficient to meet its operating expenses. Further, management cannot provide any assurances that we will be successful in accomplishing any of our plans. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if we were unable to continue as a going concern.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. The Company's legal costs associated with contingent liabilities are recorded to expense as incurred.

Income taxes

We are a corporation for U.S. federal income tax purposes. As such we are subject to U.S. federal, state and local income taxes and are taxed at the prevailing corporate tax rates. We recognize the effect of income tax positions only if these positions are more likely than not to be sustained. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The financial statements included in this annual report do not include a provision for federal income taxes since each of our statements of operations have a net loss. In the future, if we determine that such tax benefits are likely to be realized by us, we will record a deferred tax asset based on the then effective income tax rate.

JOBS Act

We qualify as an "emerging growth company" pursuant to the provisions of the JOBS Act. For as long as we are an "emerging growth company," we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, reduced disclosure obligations relating to the presentation of financial statements in Management's discussion and analysis of financial condition and results of operations and exemptions from the requirements of holding advisory "say-on-pay" votes on executive compensation and stockholder advisory votes on golden parachute compensation. We have availed ourselves of the reduced reporting obligations and executive compensation disclosure in this annual report and expect to continue to avail ourselves of the reduced reporting obligations available to emerging growth companies in future filings.

In addition, an emerging growth company can delay its adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to take advantage of such extended transition period, and as a result, we may not comply with any new or revised accounting standards on the relevant dates on which non-emerging growth companies must adopt such standards.

We will continue to qualify as an emerging growth company until the earliest of:

	●	The last day of our fiscal year following the fifth anniversary of the date of our IPO;
	●	The last day of our fiscal year in which we have annual gross revenues of $1.0 billion or more;
	●	The date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt;
	●	The date on which we are deemed to be a "large accelerated filer", which will occur at such time as we (1) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of our most recently completed second quarter, (2) have been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months and (3) have filed at least one annual report pursuant to the Exchange Act.

Inflation

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

Off-Balance Sheet Arrangements

As of December 31, 2025, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Critical Accounting Policies

We have identified the following policies below as critical to our business and results of operations. Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.

Pursuant to the JOBS Act, as an emerging growth company, we can elect to opt out of the extended transition period for adopting any new or revised accounting standards. We have elected not to 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 may adopt the standard for the private company. This may make comparison of our financial statements with any other public company that is neither an emerging growth company, nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

We have elected to take advantage of the scaled disclosures and other relief under the JOBS Act described above in this annual report (see "Implications of Being an Emerging Growth Company"), and we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us under the JOBS Act, so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Estimates. The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.