Common use of Initial Warrants Clause in Contracts

Initial Warrants. Simultaneously with the execution of this Agreement, the Company shall issue to the Purchaser one or more warrant certificates to purchase certain shares of Common Stock. The number of shares of Common Stock purchasable pursuant to the Initial Warrants shall be equal to 250,000 divided by the product of (i) 110% and (ii) the average of the closing bid prices for the five Trading Days immediately preceding the execution of this Agreement. For example, by way of illustration, if the average closing bid price of the Company's common stock for the five Trading Days immediately preceding the date of this Agreement is $0.17 per share, the Initial Warrants shall entitle Purchaser to purchase 1,336,898 shares of Common Stock at $0.187 per share ($0.17 times 110% = $0.187; $250,000 divided by .187 = 1,336,898 shares). The Initial Warrants shall have a term from their initial date of issuance of five years. The exercise price of the Initial Warrants shall be 110% of the average of the closing bid prices of the Common Stock on the Principal Market during the five Trading Days immediately prior to the execution of this Agreement. The Common Stock underlying the Initial Warrants will be registered in the Registration Statement referred to in Section 4.3 hereof. The Initial Warrants may not be exercisable by Purchaser for a period of 180 days following the execution of this Agreement. The Initial Warrants shall be in the form of Exhibit E hereto.