Common use of Financial Statements; Accounts Receivable Clause in Contracts

Financial Statements; Accounts Receivable. (a) The Company’s: (i) Form 10-KSB for the year ended December 31, 2005, as filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2006; and (ii) unaudited balance sheet, statements of operations, shareholders’ equity and cash flow as of and for the three months ended March 31, 2006 (the “Balance Sheet Date”), complete and correct copies of which are attached hereto as Schedule 3.5(a) (collectively, the “Financial Statements”), present fairly the financial position of the Company as of such dates and the results of operations for the periods covered thereby (subject, in the case of the interim financial statements, to year-end audit adjustments) and have been prepared in accordance with generally accepted accounting principles consistently applied (“GAAP”), except as to the absence of footnotes thereto. Specifically, but not by way of limitation, (x) the balance sheets or notes thereto disclose all of the debts, liabilities and obligations of any nature of the Company properly accrued at December 31, 2005 and at the Balance Sheet Date which, individually or in the aggregate, are material and which in accordance with GAAP would be required to be disclosed in such balance sheets, and the omission of which would, in the aggregate, have a Material Adverse Effect on the Company; (y) except as set forth on Schedule 3.5(a), the Company does not have any off-balance sheet arrangements or transactions; and (z) the Financial Statements include appropriate reserves for all taxes and other liabilities accrued at such date but not yet payable.