Common use of Purchaser Capitalization Clause in Contracts

Purchaser Capitalization. The authorized capital stock of Purchaser as of March 31, 2006 consists of 40,000,000 shares of common stock, par value $0.001 per share, of which there were 19,267,790 shares issued and outstanding; and 2,000,000 shares of Preferred Stock, par value $0.001 per share, of which 1,787,500 shares are designated Series A Preferred Stock, 1,205,00 of which were issued and outstanding 0 shares are designated Series B Preferred Stock, 0 of which were issued and outstanding . All outstanding shares of Purchaser Common Stock and Preferred Stock are duly authorized, validly issued, fully paid and nonassessable. As of March 31, 2006, there were outstanding (i) options to purchase an aggregate of 481,350 shares of Purchaser Common Stock, (ii) warrants to purchase 2,305,000 shares of Purchaser Common Stock, and (iii) Notes convertible into 350,000 shares of Purchaser Common Stock All shares of Purchaser Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable.