SARS Corp.(fka SARO)

[Kdub]

Can anybody analyze this and really tell me what it means? i've looked at it over and over and I can only come to one conclusion and it's the conclusion that everyone else I assume will come to. This is Section 2.03 from the 8-k. I have inserted the ammendment to the original so this is how the document should read:

SECTION 2.03 CAPITALIZATION

(a) There are five hundred fifty million (550,000,000) shares of capital stock of SARS authorized, consisting of five hundred million (500,000,000) shares of common stock, $0.001 par value per share (the “ SARS Common Shares ”) and fifty million (50,000,000) shares of preferred stock, $0.001 per share (“ SARS Preferred Shares”) . Prior to the Closing of this Merger Agreement, there will be ten million (10,000,000) SARS Common Shares issued and outstanding, and five million (5,000,000) SARS Preferred Shares issued and outstanding. It is acknowledged, that following the Closing Date, there will be approximately forty million (40,000,000) shares of Common Stock issued and outstanding, and five million (5,000,000) shares of Preferred Stock issued and outstanding.

(b) “It is acknowledged that as of the Closing Date, the individuals named, which shall be disclosed on Schedule 2.03 and attached hereto prior to the Closing, collectively, will own of record and beneficially up to approximately twenty four million (24,000,000) of the issued and outstanding SARS Common Shares, constituting sixty percent (60%) of such shares. Five million (5,000,000) SARS Common Shares shall be reserved for issuance to as part of the employee stock option plan for SARS. There exist no other outstanding rights, warrants, options or agreements for the exchange of SARS Common or Preferred Shares except as provided in this Merger Agreement.”

(c) All outstanding SARS Common Shares are validly issued, fully paid, non-assessable, not subject to pre-emptive rights and have been issued in compliance with all state and federal securities laws or other Applicable Law. The Merger Shares issuable to the Acquisition Entities, on a pro rata basis, pursuant to the Merger and the Share Exchange will, when issued pursuant to this Merger Agreement, be duly and validly authorized and issued, fully paid and non-assessable.


Can anybody explain this to me. Can anybody explain subsection A of this?