10. WARRANTS

3 Months Ended

Sep. 30, 2013

Notes to Financial Statements

WARRANTS

At September 30, 2013, the following warrants to purchase the Company’s common stock were outstanding and exercisable:

·   81,579 warrants in connection with the Underwriting Agreement entered into with MDB Capital Group, LLC as part of underwriting compensation which provided for the sale of $3 million of preferred stock as described in Note 11 on September 27, 2013 exercisable at $0.95 per share and which expire in September 2016.

·   3,157,895 warrants in connection with Securities Purchase Agreements entered into with certain investors providing for the sale of a total of $3 million of preferred stock described in Note 11 on September 27, 2013 exercisable at $0.95 per share and which expire in September 2016.

·   15,000 warrants as partial payment for services exercisable at $2.10 per share which expire in July 2015.

·   579,061 warrants in connection with the Underwriting Agreement entered into with MDB Capital Group, LLC as part of underwriting compensation which provided for the sale of $12 million of common stock as described in Note 11 on June 19, 2012 exercisable at $2.375 per share and which expire in June 2017.

·   511,604 warrants in connection with Securities Purchase Agreements entered into with certain investors providing for the sale of a total of $2,465,000 of Zero Coupon Convertible Subordinated Notes as described in Note 8 on May 1, 2012 exercisable at $2.65 per share and which expire in May 2017.

·   12,100 warrants as partial payment for services exercisable at $5.00 per share which expire March 2015 through July 2015.

·   8,000 warrants to an equipment supplier in January 2011 exercisable at $2.80 per share and which expire in January 2014.  The fair value of the warrants was $11,834 and was included in the cost of the equipment.

·   224,375 warrants acquired by certain purchasers of Company shares in March 2010 exercisable at $5.20 per share and which expire in September 2015.

·   71,667 warrants acquired by certain purchasers of Company shares in August 2009 exercisable at $6.65 per share and which expire in August 2015.

For the three months ended September 30, 2013, the Company recognized approximately $458 of expense related to warrants.

The table below summarizes warrant balances:

	Number of Warrants		Weighted Average Exercise Price Per Share
Balance at July 1, 2012		1,400,506		3.15
Warrants granted		21,300		2.95
Warrants expired		-		-
Warrants exercised		-		-
Balance at June 30, 2013		1,421,806	$	3.15
Warrants granted		3,239,474		0.95
Warrants expired		-		-
Warrants exercised		-		-
Balance at September 30, 2013		4,661,280	$	1.62