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NON RELATED PARTY WARRANTS

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements

NON RELATED PARTY WARRANTS

At September 30, 2011 there were outstanding warrants to purchase 40,000 common shares issued by the Company to an equipment supplier in November 2010 exercisable at $0.56 per share and which expire in January 2014. The fair value of the warrants was $11,834 and is included in the cost of the equipment.

At September 30, 2011 there were outstanding warrants to purchase 1,121,875 common shares acquired by certain purchasers of Company shares in March 2010 exercisable at $1.04 per share and which expire in September 2015.

At September 30, 2011 there were outstanding warrants to purchase 358,333 common shares acquired by certain purchasers of Company shares in August 2009 exercisable at $1.33 per share and which expire in August 2015.

At September 30, 2011 there were outstanding warrants to purchase 50,000 shares acquired by Empire Financial Group, Ltd. as part of the underwriting compensation in connection with our United States public offering which are exercisable at $7.20 per share and which expire in September 2012.

At September 30, 2011 there are warrants to purchase 195,800 shares issued and outstanding to Strategic Growth International in connection with capital raising activities in 2006 and 2007, with expiration dates between September 2011 and September 2012 and with exercise prices of between $3.75 and $7.20.

Warrants to purchase 120,023 common shares acquired by Empire Financial Group, Ltd. in 2006 exercisable at $3.23 per share expired during September 2011.

The table below summarizes non-related party warrant balances:

		Number of Warrants				Weighted-Average Exercise Price Per Share
Balance at July 1, 2010			1,846,031			$	1.76
Warrants granted			3,067,797				1.24
Warrants expired			-				-
Warrants exercised			(3,027,797	)			(1.25	)
Balance at June 30, 2011			1,886,031				1.73
Warrants granted (See Note 12)			2,621,359				0.55
Warrants expired			(120,023	)			3.23
Warrants exercised (See Note 12)			(2,621,359	)			(0.55	)
Balance at September 30, 2011			1,766,008			$	1.86

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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