J.P.Morgan Investment Banking

APPENDIX Value of NOLS K-2 has $279.8mm of U.S. NOLS outstanding in its K-2 International North America, Inc. ("KINA") subsidiary $0.5mm are restricted in use $279.3mm are unrestricted In a change of control transaction, K-2's NOLs will be subject to certain restrictions Limit on using more than (4.36% * equity value of KINA) of NOLS in any given year Only exception is that if K-2 sells any assets within KINA where the sale price is greater than the basis, K-2 may be able to utilize the NOLS without limitation to shield any capital gains JPMorgan PROJECT PLATO 33

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