Common use of Basic Financial Information Clause in Contracts

Basic Financial Information. The Company will furnish the following reports to each Investor who owns at least 100,000 Shares and/or Conversion Stock and/or Warrant Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like), or Bridge Notes in an aggregate principal amount of at least $400,000: (i) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, certified by independent public accountants of recognized national standing selected by the Company. (ii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments. (iii) as soon as practicable, but in any event within thirty (30) days of the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited balance sheet and statement of stockholders’ equity as of the end of such month, all prepared in accordance with U.S. generally accepted accounting principles (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with U.S. generally accepted accounting principles). (iv) as soon as practicable, but in any event forty-five (45) days before the end of each fiscal year, a comprehensive operating budget and business plan, as approved the Board, for the next fiscal year which forecasts the Company’s revenues, expenses and cash position (collectively, the “Budget”), prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any revisions to such budgets prepared by the Company.

Basic Financial Information. The Company will furnish the following reports to each Investor who owns at least 100,000 Shares and/or Conversion Stock and/or Warrant Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like), or Bridge Notes in an aggregate principal amount of at least $400,000Investor: (i) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty ninety (12090) days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, Subsidiaries as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiariesSubsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, certified by the Company’s independent public accountants of recognized national standing selected by the Companyaccountants. (ii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, Subsidiaries as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiariesSubsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments. (iii) as As soon as practicablepracticable after the end of each month, but and in any event within thirty (30) days of after the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited consolidated balance sheet of the Company and statement of stockholders’ equity its Subsidiaries as of the end of such monthmonthly period, all and unaudited consolidated statements of income and cash flows of the Company and its Subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles (except that such financial statements may (i) be consistently applied, subject to changes resulting from normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with U.S. generally accepted accounting principles)adjustments. (iv) as soon as practicable, but in any event forty-five (45) days before the end of each fiscal year, a comprehensive operating budget and business plan, as approved the Board, for the next fiscal year which forecasts the Company’s revenues, expenses and cash position (collectively, the “Budget”), prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any revisions to such budgets prepared by the Company.

Basic Financial Information. The Company will furnish the following reports to each Investor Holder who owns at least 100,000 3,000,000 Shares and/or Conversion Stock and/or Warrant Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like), or Bridge Notes in an aggregate principal amount of at least $400,000:): (i) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, audited and certified by independent public accountants of recognized national standing selected by the Company. (ii) As soon as practicable after the end of each calendar month, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such monthly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments. (iii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the CompanyCompany commencing after the first full quarterly period ending on March 31, 2007, and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments. (iiiiv) as As soon as practicable, but in any event within at least thirty (30) days of the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited balance sheet and statement of stockholders’ equity as of the end of such month, all prepared in accordance with U.S. generally accepted accounting principles (except that such financial statements may (i) be subject prior to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with U.S. generally accepted accounting principles). (iv) as soon as practicable, but in any event forty-five (45) days before the end of each fiscal year, a comprehensive operating budget and business plan, as approved the Board, plan for the next fiscal year which forecasts the Company’s revenues, expenses and cash position (collectively, the “Budget”)year, prepared on a monthly basis, including balance sheets, income statements, statements and statements of cash flow flows for such months and, promptly after as soon as prepared, any revisions to such other budgets or revised budgets prepared by the Company.

Basic Financial Information. The Company will furnish the following reports to each Investor who owns at least 100,000 Shares and/or Conversion Stock and/or Warrant Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like), or Bridge Notes in an aggregate principal amount of at least $400,000Major Investor: (i) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty ninety (12090) days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, certified by the independent public accountants of recognized national standing selected by the Company, and as soon as practicable, and in any event in accordance with a timetable to be set by the Board of Directors in its reasonable discretion not to exceed one hundred eighty (180) days after each fiscal year of the Company, consolidated audited financial statements for the fiscal year then ended. (iiA) As soon as practicable after the end of the first, second and third each quarterly accounting periods period in each fiscal year of the Company, and in any event within forty-forty five (45) days after the end of the first, second, and third each quarterly accounting periods period in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments.; provided that; this provision shall not apply to the fourth quarterly accounting period; (iii) as As soon as practicablepracticable after the end of each month, but and in any event within thirty (30) days of after the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited consolidated balance sheet of the Company and statement of stockholders’ equity its subsidiaries, if any, as of the end of such monthmonthly period, all and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles (except that such financial statements may (i) be consistently applied, subject to changes resulting from normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with U.S. generally accepted accounting principles).adjustments; and (iv) as soon as practicable, but in any event forty-At least forty five (45) days before prior to the end beginning of each fiscal year an operating plan for such fiscal year, a comprehensive operating budget and business plan, as approved the Board, for the next fiscal year which forecasts by the Company’s revenues, expenses and cash position (collectively, the “Budget”), prepared on a monthly basis, including balance sheets, income statements, and statements Board of cash flow for such months and, promptly after prepared, any revisions to such budgets prepared by the CompanyDirectors.

Basic Financial Information. The Company will furnish the following reports to each Investor Holder who owns at least 100,000 2,000,000 Shares and/or Conversion Stock and/or Warrant Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like), or Bridge Notes in an aggregate principal amount of at least $400,000:): (i) As soon as practicable after the end of each fiscal year of the Company, unless otherwise approved by the Board of Directors, and in any event within one hundred twenty ninety (12090) days after the end of each fiscal year of the Company, a an audited consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, certified by independent public accountants of recognized national standing selected by the Company.; (ii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-forty five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments.; and (iii) as As soon as practicablepracticable after the end of each month, but and in any event within thirty (30) days of after the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited consolidated balance sheet of the Company and statement of stockholders’ equity its subsidiaries, if any, as of the end of such monthmonthly period, all and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles (except that such financial statements may (i) be consistently applied, subject to changes resulting from normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with U.S. generally accepted accounting principles)adjustments. (iv) as soon as practicable, but in any event forty-five (45) days before the end of each fiscal year, a comprehensive operating budget and business plan, as approved the Board, for the next fiscal year which forecasts the Company’s revenues, expenses and cash position (collectively, the “Budget”), prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any revisions to such budgets prepared by the Company.

Basic Financial Information. The Company will furnish the following reports to each Investor Holder who owns at least 100,000 1,500,000 Shares and/or Conversion Stock and/or Warrant Stock both as of the date hereof and continues to own 1,500,000 Shares thereafter (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like), or Bridge Notes in an aggregate principal amount of at least $400,000:) (each a “Major Information Holder”): (i) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) 120 days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, certified by independent public accountants of recognized national standing selected by the Company.; (ii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) 45 days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments.; (iii) as As soon as practicable, but in any event within thirty (30) days of practicable after the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited consolidated balance sheet of the Company and statement of stockholders’ equity its subsidiaries, if any, as of the end of each such month, all and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such month, prepared in accordance with U.S. generally accepted accounting principles (except that such financial statements may (i) be consistently applied, subject to changes resulting from normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with U.S. generally accepted accounting principles)adjustments. (iv) as soon as practicable, but in any event forty-five (45) At least 30 days before prior to the end of each fiscal year, a comprehensive year an operating budget and business plan, as approved the Board, for the next fiscal year which forecasts forecasting the Company’s revenues, expenses and cash position (collectively, the “Budget”), prepared on a monthly basis, including balance sheets, income statementsmonth-to-month basis for the upcoming fiscal year that has been approved by the Board of Directors; and (v) As soon as practicable after the end of each quarterly accounting period in each fiscal year of the Company, and statements in any event within 45 days after the end of cash flow for such months andeach quarterly accounting period in each fiscal year of the Company, promptly after prepared, any revisions to such budgets prepared a current capitalization table certified by the Chief Financial Officer or Treasurer of the Company.

Basic Financial Information. The As long as at least twenty percent (20%) of the shares of Preferred Stock originally issued remain outstanding, the Company will furnish the following reports deliver to each Investor who owns at least 100,000 Shares and/or Conversion Stock and/or Warrant Stock (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like), or Bridge Notes in an aggregate principal amount of at least $400,000Major Investor: (i) As as soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) 150 days after the end of each fiscal year of the Company, Company a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, and audited and certified by independent public accountants of recognized national standing selected by the Company., which audit may be waived by a vote of the Preferred Majority, in which case the Company shall deliver such unaudited statements within 60 days after the end of such fiscal year; (ii) As as soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) 45 days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments.adjustments and such financial statements may not contain accompanying notes; (iii) as soon as practicablepracticable after the each month, but and in any event within thirty (30) 30 days after the end of each such month, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each monthsuch monthly period, an and unaudited consolidated statements of income statement and statement of cash flows of the Company and its subsidiaries, if any, for such monthperiod, and an unaudited balance sheet and statement of stockholders’ equity as of the end of such month, all prepared in accordance with U.S. generally accepted accounting principles (except that such financial statements may (i) be consistently applied, subject to changes resulting from normal year-end audit adjustments and (ii) such financial statements may not contain all notes thereto that may be required in accordance accompanying notes, along with U.S. generally accepted accounting principles).a comparison of such results to the Company’s operating plan; (iv) at least 30 days prior to the beginning of each of the Company’s fiscal years an annual operating plan for such fiscal year (and as soon as practicableavailable, but in any event forty-five subsequent material revisions thereto); (45v) days before as soon as practicable after the end of each fiscal year, and in any event within 30 days thereafter, a comprehensive operating budget report setting forth in detail all equity and debt holders of the Company as of the end of such year; (vi) a capitalization table promptly upon the request of a Major Investor, but no more frequently than once per calendar quarter; and (vii) such other information relating to the financial condition or business planof the Company as any Major Investor may, as approved from time to time, reasonably request related to monitoring its investment in the BoardCompany; provided, however, that the Company shall not be obligated under this Subsection 3.1(a) to provide a complete set of materials prepared by or on behalf of the Company for the purpose of distribution to the Board or any information: (i) that the Company reasonably determines in good faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in a form acceptable to the Company, and is not a trade secret described in the next fiscal year clause); (ii) that the Company reasonably determines in good faith to be a technology or scientific trade secret; or (iii) the disclosure of which forecasts would adversely affect the attorney-client privilege between the Company and its counsel. Notwithstanding anything else set forth herein, the Company shall deliver to each Investor that is not a Major Investor and continues to hold at least fifty percent (50%) of the shares of Preferred Stock originally purchased by such Investor the annual financial reports set forth in Section 3.1(a)(i) above and the quarterly financial reports set forth in Section 3.1(a)(ii) above at the same time the Company delivers such reports to the Major Investors. Notwithstanding anything else in this Section 3.1 to the contrary, the Company may cease providing the information set forth in this Section 3.1 during the period starting with the date 30 days before the Company’s revenues, expenses and cash position (collectively, good-faith estimate of the “Budget”), prepared on date of filing of a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any revisions registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such budgets prepared by registration statement and related offering; provided that the Company’s covenants under this Section 3.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.

Basic Financial Information. The Company will furnish the following reports to each Investor Holder who owns at least 100,000 Shares and/or Conversion Stock and/or Warrant Stock 5,500,000 shares of Registrable Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like), or Bridge Notes in an aggregate principal amount of at least $400,000:) (the “Significant Holders”): (i) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred and twenty (120) days after the end of each fiscal year of the Company, a an audited consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and audited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, certified by independent public accountants of recognized national standing selected by the Company.; (ii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-forty five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments.; (iii) as As soon as practicable, practicable but in any event within thirty (30) days of after the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited consolidated balance sheet of the Company and statement of stockholders’ equity its subsidiaries, if any, as of the end of each such month, all and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles (except that such financial statements may (i) be consistently applied, subject to changes resulting from normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with U.S. generally accepted accounting principles).adjustments; (iv) As soon as practicable, and in any event at least thirty (30) days prior to the beginning of each fiscal year, detailed monthly financial projections, and an annual budget and business plan for such year; (v) As soon as practicable, but in any event within forty-five (45) days before after the end of each of the first three (3) quarters of each fiscal yearyear of the Company, a comprehensive operating budget statement showing the number of shares of each class and business planseries of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as approved to permit the Board, for the next fiscal year which forecasts Significant Holders to calculate their respective percentage equity ownership in the Company’s revenues; and (vi) such other information relating to the financial condition, expenses and cash position business, prospects, or corporate affairs of the Company as any Significant Holder may from time to time reasonably request; provided, however, that the Company shall not be obligated under this Section 3.1(a)(vi) to provide information (collectively1) that the Company reasonably determines in good faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, the “Budget”), prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any revisions in form acceptable to such budgets prepared by the Company) or (2) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.