Common use of Capital Stock of the Company; Ownership of the New Securities Clause in Contracts

Capital Stock of the Company; Ownership of the New Securities. (a) As of the date hereof, the authorized capital stock of the Company consists of (x) 40,000,000 shares of Common Stock, of which (i) 11,399,922 shares are outstanding, (ii) 458,689 shares of Common Stock are reserved for issuance upon conversion of the Series A Preferred Stock, (iii) 12,783,000 shares of Common Stock are reserved for issuance upon conversion of Series B Preferred Stock, (iv) 48,732 shares of Common Stock are reserved for issuance upon conversion of the Convertible Debentures, (v) 1,200,265 shares are reserved for issuance upon exercise of stock options, and (vi) 1,219,342 shares are reserved for issuance upon conversion of outstanding warrants; (y) 800,000 shares of Series A Preferred Stock, of which 150,144 shares are issued and outstanding and designated as Series A Preferred Stock; and (z) 25,000,000 shares of Series B Preferred Stock, of which (i) 4,500,000 shares are issued and outstanding and designated as Series B Preferred Stock, and (ii) 8,283,000 shares are reserved for issuance on conversion of outstanding warrants. All of the outstanding shares of the Company’s capital stock are duly and validly issued, fully paid and nonassessable. None of the issued and outstanding shares of capital stock of the Company was issued in violation of any preemptive rights. As of the date hereof, except as described above or as set forth in Section 3.02(a) of the Disclosure Schedule, there are no options, warrants, subscriptions, calls, convertible securities or debentures or other rights, agreements, arrangements or commitments relating to the capital stock of the Company or obligating the Company to issue or sell any shares of capital stock of, or any other equity interest in, the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person.

Capital Stock of the Company; Ownership of the New Securities. (a) As of the date hereof, the authorized capital stock of the Company consists of (x) 40,000,000 shares of Common Stock, of which (i) 11,399,922 8,906,446 shares are outstanding, (ii) 458,689 shares of Common Stock are reserved for issuance upon on conversion of the Series A Preferred Stock, (iii) 12,783,000 shares of Common Stock are reserved for issuance upon conversion of Series B Preferred Stock, (iv) 48,732 shares of Common Stock are reserved for issuance upon on conversion of the Convertible Debentures, and (viv) 1,200,265 1,137,424 shares are reserved for issuance upon the exercise of stock options, and (vi) 1,219,342 shares are reserved for issuance upon conversion of outstanding warrants; (y) 800,000 shares of Series A Preferred Stock, of which 150,144 shares are issued and outstanding and designated as Series A Preferred Stock; and (z) 25,000,000 shares of Series B Preferred Stock, of which (i) 4,500,000 shares are issued and outstanding and designated as Series B Preferred Stock, and (ii) 8,283,000 shares are reserved for issuance on conversion of outstanding warrants. All of the outstanding shares of the Company’s capital stock are duly and validly issued, fully paid and nonassessable. None of the issued and outstanding shares of capital stock of the Company was issued in violation of any preemptive rights. As of the date hereof, except as described above or as set forth in Section 3.02(a) of the Disclosure Schedule, there are no options, warrants, subscriptions, calls, convertible securities or debentures or other rights, agreements, arrangements or commitments relating to the capital stock of the Company or obligating the Company to issue or sell any shares of capital stock of, or any other equity interest in, the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person.