KLC OpCo has leveraged its scale_and operational expertise to roll out a proprietary curriculum and to provide enhanced corporate level services —- Curriculum has been developed, rolled out and refined over many years and provides a significant competitive advantage in an industry where smail independent players do not have the resources to develop comparable programs. — Operational leverage allows for enhanced marketing, back-office, legal and compliance functions, keeping KLC OpCo at the forefront of education standards. Controls that meet or exceed requirements established by licensing authorities, state and federal government and accrediting bodies — Controls include rigorous and stringent hiring procedures and uniform rules for conduct. -~» 43% of KLC OpCo's centers, over four times the industry average of 10%, are accredited by the National Association for the Education of Young Children (referred fo herein as "NAEYC"), the nation's leading accreditation body. Management believes that ali the Company’s centers’ operations and policies meet or are substantially compliant with NAEYC accreditation requirements. # A compelling business model at 412 As the state of education across the U.S. is generating increasing concerns, 412 provides a compelling value proposition -— Children continue to perform poorly on assessment tests geared fo measure reading, writing and math skills. The passing of legislation such as the "No Child Left Behind Act of 2001" which, among other things, provides for increased funding for education and implementation of achievement level standards, demonstrates the commitment of government to address the issue. Technology and content platform easily leverageable to provide results-driven curriculum _and service —-- With $70 million invested in the development of the platform for kindergarten to 9th grade classes, extension of the offering into new states and schools is expected te be achieved at relatively low costs. — k12 benefits f