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<SEC-DOCUMENT>0001003297-10-000227.txt : 20100928
<SEC-HEADER>0001003297-10-000227.hdr.sgml : 20100928
<ACCEPTANCE-DATETIME>20100928160323
ACCESSION NUMBER:		0001003297-10-000227
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20100630
FILED AS OF DATE:		20100928
DATE AS OF CHANGE:		20100928

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PRO DEX INC
		CENTRAL INDEX KEY:			0000788920
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				841261240
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14942
		FILM NUMBER:		101093864

	BUSINESS ADDRESS:	
		STREET 1:		2361 MCGAW AVENUE
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614
		BUSINESS PHONE:		949-769-3200

	MAIL ADDRESS:	
		STREET 1:		2361 MCGAW AVENUE
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>espdex10k.htm
<TEXT>
<html>

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<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:center;page-break-after:avoid;font-size:12.0pt;font-family:"Times New Roman";font-weight:normal;'>
<b><font style="font-size: 14.0pt">UNITED STATES </font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:center;page-break-after:avoid;font-size:12.0pt;font-family:"Times New Roman";font-weight:normal;'>
<b><font style="font-size: 14.0pt">SECURITIES AND EXCHANGE COMMISSION</font></b></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in;font-family:"Times New Roman";font-weight:bold;text-align:center'>Washington, D.C. 20549</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b><font style="font-size: 6.0pt">&nbsp;</font></b></p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in;font-size:11.0pt;font-family:"Times New Roman";font-weight:bold;text-align:center'>
<font style="font-size: 24.0pt">FORM
  10-K</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><font style="font-size: 14.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.75in;text-indent:-.75in;text-autospace:
  none'><b>[X]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>For
  the fiscal year ended June 30, 2010</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b><font style="font-size: 6.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b>OR</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.75in;text-indent:-.75in;text-autospace:
  none'><b>[&nbsp;
  ]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.&nbsp;
  FOR THE TRANSITION PERIOD FROM&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>TO&nbsp;
  <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .</u></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>Commission
  File Number&nbsp;&nbsp;&nbsp; 000-14942 </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 24.0pt">PRO-DEX, INC.&nbsp;&nbsp;&nbsp; </font></b>
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>(Exact
  name of registrant as specified in its charter)&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<table border="0" style="border-collapse: collapse" width="100%" id="table1">
	<tr>
		<td width="50%">
		<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none; margin-top:0in'>
		<b><u>Colorado </u></b></p></td>
		<td align="center" width="50%"><b><u>84-1261240
  </u></b></td>
	</tr>
	<tr>
		<td width="50%">
		<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none; margin-top:0in'>
		<b>(State
  or other jurisdiction of</b></p></td>
		<td align="center" width="50%">
		<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none; margin-top:0in'>
		<b>(I.R.S.
  Employer Identification No.) </b></p></td>
	</tr>
	<tr>
		<td width="50%">
		<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none; margin-top:0in'>
		<b>incorporation
  or organization)</b></p></td>
		<td width="50%">&nbsp;</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;&nbsp; </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><u>2361 McGaw Avenue, Irvine, California&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 92614</u></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>(Address
  of principal executive offices)&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Zip
  Code)</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;&nbsp; </font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>Registrant&#146;s
  telephone number: (<u>949) 769-3200 </u></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>Securities
  registered under Section 12(b) of the Exchange Act: </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 7.0pt">&nbsp;</font></b></p>
<div align=center>
	<table class=MsoNormalTable border=0 cellpadding=0
   style='border-collapse:collapse' width="50%">
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<b><font style="font-size: 7.0pt">&nbsp;</font></b></p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:
    none'><b><font style="font-size: 10.0pt">Name of each exchange </font></b>
			</p></td>
			<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:
    none'><b><font style="font-size: 10.0pt">&nbsp;</font></b></p></td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:
    none'><b><u><font style="font-size: 10.0pt">Title of each class </font></u>
			</b></p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:
    none'><b><u><font style="font-size: 10.0pt">on which registered </font></u>
			</b></p></td>
			<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:
    none'><b><font style="font-size: 10.0pt">&nbsp;</font></b></p></td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:
    none'><b><font style="font-size: 10.0pt">Common Stock, no par value</font></b></p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:
    none'><b><font style="font-size: 10.0pt">NASDAQ Capital Market </font></b>
			</p></td>
			<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:
    none'><b><font style="font-size: 10.0pt">&nbsp;</font></b></p></td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>Securities
registered under Section 12(g) of the Exchange Act: None.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.&nbsp; Yes <font face="Wingdings">&#111;</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
<font face="Wingdings">&#120;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act.&nbsp; Yes
<font face="Wingdings">&#111;</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
<font face="Wingdings">&#120;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months, and (2) has been subject to such filing requirements for the past 90
days. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>Yes
<font face="Wingdings">&#120;</font>&nbsp;&nbsp;&nbsp; No&nbsp;
<font face="Wingdings">&#111;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes
<font face="Wingdings">&#111;</font>&nbsp;&nbsp;&nbsp;&nbsp;No
<font face="Wingdings">&#111;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained in this Form 10-K, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
<font face="Wingdings">&#120;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:3.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;
margin-bottom:.0001pt;text-indent:24.5pt'>Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company (as
defined in Rule&nbsp;12b-2 of the Exchange Act). </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:3.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;
margin-bottom:.0001pt;text-indent:24.5pt'>&nbsp;</p>
<table border="0" style="border-collapse: collapse" width="100%" id="table21">
	<tr>
		<td width="25%" align="center"><font face="Times New Roman">Large accelerated filer&nbsp;&nbsp;</font><font face="Wingdings">&#111;</font></td>
		<td width="25%">
		<p align="center"><font face="Times New Roman">Accelerated filer&nbsp;&nbsp;</font><font face="Wingdings">&#111;</font></td>
		<td width="25%">
		<p align="center"><font face="Times New Roman">Non-accelerated filer&nbsp;&nbsp;</font><font face="Wingdings">&#111;</font></td>
		<td width="25%">
		<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:3.0pt;margin-right:0in;margin-bottom:0in;
margin-left:0in;margin-bottom:.0001pt;text-align:center'>
		<font face="Times New Roman">Smaller reporting company&nbsp;&nbsp;</font><font face="Wingdings">&#120;</font></p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>Yes
<font face="Wingdings">&#111;</font>&nbsp;&nbsp; No&nbsp;
<font face="Wingdings">&#120;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the closing sales price
on the Nasdaq Capital Market of such common equity on December 31, 2009:<u> $3,553,022</u>.
&nbsp;For the purpose of this calculation, shares owned by officers, directors and
10% stockholders known to the registrant have been deemed to be owned by
affiliates. This determination of affiliate status is not a determination for
other purposes. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The number of shares outstanding of each of the issuer&#146;s classes of common
stock outstanding as of the latest practicable date: 3,251,850
shares of common stock, no par value, as of September 23, 2010. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>DOCUMENTS INCORPORATED BY REFERENCE: Part III incorporates by reference
certain information from the registrant's definitive proxy statement (the
&quot;Proxy Statement&quot;) for the 2010 Annual Meeting of Shareholders.&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 1 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:center;
page-break-after:avoid; margin-left:0in; margin-right:0in; margin-top:0in'><b>PRO-DEX,
INC. </b></p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:4.5pt;margin-right:0in;margin-bottom:0in;
margin-left:0in;margin-bottom:.0001pt;text-align:center;page-break-after:avoid'>
<b>TABLE OF CONTENTS </b></p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;page-break-after:avoid; margin-left:0in; margin-right:0in; margin-top:0in'>
<font style="font-size: 9.0pt">&nbsp;</font></p>
<div align=center>
	<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="100%">
		<tr>
			<td style='width:102px;padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: .5pt">&nbsp;</font></p></td>
			<td style='width:1199px;padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: .5pt">&nbsp;</font></p></td>
			<td style='padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<font style="font-size: .5pt">&nbsp;</font></p></td>
		</tr>
		<tr style='height:24.75pt'>
			<td valign=top style='padding:0in;
  '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'><b>PART&nbsp;I</b></p></td>
			<td valign=bottom style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-size:4.0pt;font-family:"Times New Roman"; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-size:4.0pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  1</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Description_of_Business">Business</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp; 3</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;1A</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Risk_Factors">Risk Factors</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp; 8</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-3.0pt'>&nbsp;Item
  1B</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Item_1B">Unresolved Staff Comments</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp; 15</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  2</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Properties">Properties</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>15</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  3</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Legal_Proceedings">Legal Proceedings</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>15</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  4</p></td>
			<td valign=bottom style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Item_4.___[Removed_and_Reserved]_">[Removed<u> and Reserved]</u></a></p>
			</td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>16</p>
			</td>
		</tr>
		<tr>
			<td style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;</p></td>
			<td style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>&nbsp;</p>
			</td>
			<td style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:22.5pt'>
			<td valign=top style='padding:0in;
  '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'><b>PART&nbsp;II</b></p></td>
			<td valign=bottom style='padding:0in;
  '>
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman"; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:0in;' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  5</p></td>
			<td valign=top style='padding-left:0in; padding-right:0in; padding-top:0in; padding-bottom:0in'>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman"'>
			<a href="#Item5_Market_for">Market For Registrant&#146;s Common Equity, Related Stockholder
  Matters and Issuer Purchases of Equity Securities</a> </p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>16</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  6</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Financial_Data">Selected Financial Data</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>17</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  7</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Financial_Data">Management&#146;s Discussion and Analysis of
  Financial Condition and Results of Operations</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>18</p>
			</td>
		</tr>
		<tr style='height:16.65pt'>
			<td valign=top style='padding:0in;
  '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-3.0pt'>&nbsp;Item
  7A</p></td>
			<td valign=top style='padding:0in;
  '>
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-right:0in; margin-top:0in'>
			<a href="#Item_7A.__Quantitative_and_Qualitative_Disclosures_About_Market_Risks__">Quantitative
  and Qualitative Disclosures About Market Risk</a></p></td>
			<td valign=bottom style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>31</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  8</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Item_8.___Financial_Statements_and_Supplementary_Data">Financial
  Statements and Supplementary Data</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>32</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  9</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Item_9.___Changes_in_and_Disagreements_with_Accountants_on_Accounting_and_Financial_Disclosure">Changes
  in and Disagreements with Accountants on Accounting and Financial Disclosure</a></p>
			</td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>32</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;9A</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Item_9A.___Controls_and_Procedures">Controls
  and Procedures</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>32</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;9B</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a
  href="#Other_Information_page26">Other
  Information</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>33</p>
			</td>
		</tr>
		<tr>
			<td style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;</p></td>
			<td style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>&nbsp;</p>
			</td>
			<td style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:23.4pt'>
			<td valign=top style='padding:0in;
  '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'><b>PART&nbsp;III</b></p></td>
			<td valign=bottom style='padding:0in;
  '>
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman"; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:0in;' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:.2in'>
			<td valign=top style='padding:0in;
  '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  10</p></td>
			<td style='padding-left:0in; padding-right:0in; padding-top:0in; padding-bottom:0in'>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-right:0in; margin-top:0in'>
			<a
  href="#Other_Information_page26">Directors,
  Executive Officers and Corporate Governance</a></p></td>
			<td valign=bottom style='padding-left:.1in; padding-right:0in; padding-top:0in; padding-bottom:0in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>33</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  11</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a
  href="#Other_Information_page26">Executive
  Compensation</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>33</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  12</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a href="#Other_Information_page26">Security Ownership of Certain
  Beneficial Owners and Management and Related Stockholder Matters</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>33</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  13</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a
  href="#Page27_Relationships_Fees_Exh">Certain
  Relationships and Related Transactions, and Director Independence</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>33</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  14</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<a
  href="#Page27_Relationships_Fees_Exh">Principal
  Accountant Fees and Services</a></p></td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>33</p>
			</td>
		</tr>
		<tr>
			<td style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;</p></td>
			<td style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>&nbsp;</p>
			</td>
			<td style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:27.0pt'>
			<td valign=top style='padding:0in;
  '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'><b>PART&nbsp;IV</b></p></td>
			<td valign=bottom style='padding:0in;
  '>
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman"; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:0in;' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;Item
  15</p></td>
			<td valign=bottom style='padding-left:0in; padding-right:0in; padding-top:0in; padding-bottom:0in'>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>
			<u><a href="#Item_15.___Exhibits_">Exhibits and Financial Statement Schedules</a></u></p>
			</td>
			<td valign=bottom style='padding:0in 0in 0in .1in' align="right">
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>33</p>
			</td>
		</tr>
		<tr>
			<td valign=top style='padding:0in; '>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt;
  margin-bottom:.0001pt;text-indent:-12.0pt'>&nbsp;</p></td>
			<td valign=bottom style='padding:0in; '>
			<p style='margin-right:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:0in;margin-right:0in;margin-bottom:0in;margin-bottom:.0001pt;'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding:0in 0in 0in .1in'>
			<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 2 -</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<p style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>PART
I</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Cautionary
statement pursuant to safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>When used in this report on Form 10-K, the words &quot;expects,&#148;
&quot;anticipates,&quot; &quot;estimates,&quot; &quot;believes,&quot;
&quot;hopes,&quot; &quot;intends,&quot; &quot;forecasts&quot; and similar
expressions are intended to identify &quot;forward-looking statements.&quot;
These statements which are not historical or current facts are made pursuant to
the safe harbor provisions of Section 27a of the Securities Act of 1933, as
amended, and Section 21e of the Securities Exchange Act of 1934, as amended,
and the Company intends that such forward-looking statements be subject to
those safe harbor provisions for such statements. The Company wishes to caution
readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date of this report. While forward-looking
statements represent management's best judgment as to what may occur in the
future, they are subject to risks, uncertainties and important factors beyond
the control of the Company that could cause actual results and events to differ
materially from historical results of operations and events as well as those
presently anticipated or projected. These factors include adverse economic
conditions, entry of new and stronger competitors, capital availability,
unexpected costs, compliance with contractual obligations (including, but not
limited to, covenants in lending agreements), failure to capitalize upon access
to new customers, and marketplace delisting. Other risks and uncertainties
which may affect forward-looking statements about the Company's business and
prospects include, but are not limited to, the ramifications of the continued
industry consolidation of dental and medical products manufacturers, dealers
and distributors, managed health care, the Company's ability to effectively
integrate operations of acquired companies, market acceptance and support of
new products, maintaining favorable supplier relationships, the inability to
engage qualified human resources as needed, regulatory compliance and general
economic conditions. The Company disclaims any obligations subsequently to
revise any forward-looking statements to reflect events or circumstances after
the date of such statement or to reflect the occurrence of anticipated or
unanticipated events.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>Adjustment for Reverse Stock Split</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>On June 17,
2010, we effected a 1-for-3 reverse stock split of our common stock.&nbsp; Unless
clearly indicated in this report on Form 10-K to the contrary, all references
to stock price or number of shares of common stock contained in this report
(whether prior to, on or after June 17, 2010) are presented on an &#147;as adjusted&#148;
basis to reflect the effect of the reverse stock split</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<a name="Description_of_Business"></a><b><font style="font-size: 11.0pt">Item 1. &nbsp;&nbsp;&nbsp;&nbsp;
</font>Business</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>Company Overview</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b><font style="font-size: 10.0pt">&nbsp;</font></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Pro-Dex, Inc.
(&#147;Company,&#148; &#147;Pro-Dex&#148;, &#147;we,&#148; &#147;our,&#148;, &#147;us&#148;), with
operations in Irvine, California, Beaverton, Oregon and Carson City, Nevada, provides
power and control products used in medical, aerospace, military, research and
industrial applications.&nbsp; Experience in multi-axis motion control, fractional
horsepower motors and rotary drive systems allow us to develop products that
require high precision in harsh environments.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our products are found in hospitals, dental
offices, medical engineering labs, commercial and military aircraft, scientific
research facilities and high-tech manufacturing operations around the world.
The names Micro Motors, Oregon Micro Systems, and Astromec are used for
marketing purposes as brand names.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 3 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our principal headquarters are located at 2361 McGaw Avenue, Irvine, California 92614 and our phone number is 949-769-3200.&nbsp; Our Internet address is
<u><font color="#0000FF">www.pro-dex.com</font></u>.&nbsp; Our annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments
to those reports and other SEC filings, are available free of charge through
our website as soon as reasonably practicable after such reports are
electronically filed with, or furnished to, the SEC.&nbsp; In addition, our Code of
Ethics and other corporate governance documents may be found on our website at
the Internet address set forth above.&nbsp; Our filings with the SEC may also be read and copied at the SEC&#146;s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.&nbsp; You may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330.&nbsp; The SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC at  www.sec.gov  and company specific information at www.sec.gov
/edgar/searchedgar/companysearch.html. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>All years relating to financial data herein shall refer to fiscal years
ending June 30, unless indicated otherwise.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>Description of Business</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The majority of
our revenue is derived from designing, developing and manufacturing rotary
drive systems for the medical device and dental industries, motion control
software and hardware for industrial and scientific applications and fractional
horsepower DC motors for aerospace, medical and military applications. A large
part of our revenue has been the result of developing and selling numerous
types of private label rotary drive systems for use in cranial, spinal, and arthroscopic
orthopedic surgery and dental applications.&nbsp;&nbsp;&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-autospace:ideograph-numeric ideograph-other'>Our
revenue is derived from five main customer types in the three core business
areas of medical device, motion control and small motor products and related
services.&nbsp; The proportion of total sales to each customer type and sales by
location are noted in the tables below: </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0 id="table2">
	<TR>
		<TD>
		<p align="center"><FONT size=2 face="serif">Sales by customer type ($'000)</FONT></TD>
		<TD align="center" colspan="2" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2010</FONT></TD>
		<TD align="center" colspan="2" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2009</FONT></TD>
		<TD align="center" colspan="2" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2008</FONT></TD>
		<TD align="center" colspan="2" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2007</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">Medical</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 13,800</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">59%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 11,107</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">53%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 14,121</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">56%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 10,275</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">48%</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">Aerospace</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2,985</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">13%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2,624</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">12%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2,382</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">9%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2,445</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">11%</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">Industrial</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">2,318</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">10%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">2,448</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">12%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">3,279</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">13%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">3,317</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">15%</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">Dental</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2,119</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">9%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2,620</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">12%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">3,290</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">13%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">3,476</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">16%</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">Repairs, Government and other</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">1,989</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">9%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">2,324</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">11%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">2,054</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">8%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">2,050</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">10%</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">Total Sales</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">$ 23,211</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">100%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">$ 21,122</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">100%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">$ 25,126</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">100%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">$ 21,563</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">100%</FONT></TD>
	</TR>
</TABLE>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0 id="table3">
	<TR>
		<TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Sales by location ($'000)</FONT></TD>
		<TD colspan="2" align="center" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2010</FONT></TD>
		<TD colspan="2" align="center" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2009</FONT></TD>
		<TD colspan="2" align="center" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2008</FONT></TD>
		<TD colspan="2" align="center" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">2007</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Irvine</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 17,780</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">77%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 15,637</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">74%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 18,268</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">73%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 13,852</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">64%</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Carson City</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">3,306</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">14%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">3,429</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">16%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">3,453</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">14%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">3,590</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">17%</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Beaverton</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">2,264</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">10%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">2,241</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">11%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">3,443</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">14%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">4,121</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">19%</FONT></TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Interlocation sales</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">(139)</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">(1%)</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">(185)</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">(1%)</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">
		<FONT size=2 face="serif">(38)</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">-</TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">-</TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000">-</TD>
	</TR>
	<TR>
		<TD style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Total Sales</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 23,211</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">100%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 21,122</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">100%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 25,126</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">100%</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">$ 21,563</FONT></TD>
		<TD align="right" style="border-style: solid; border-width: 1px; padding-left: 4px; padding-right: 4px; padding-top: 1px; padding-bottom: 1px" bordercolor="#000000" bgcolor="#CBDBD1">
		<FONT size=2 face="serif">100%</FONT></TD>
	</TR>
</TABLE>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The majority of the Irvine-based sales include medical products that
utilize proprietary designs developed by us under exclusive design and supply
agreements.&nbsp; Our dental products are primarily sold to original equipment
manufacturers and dental product distributors.&nbsp; In Beaverton, we design and
manufacture embedded multi-axis motion controllers used to regulate the motion
of servo and stepper motors, predominantly for the factory automation,
scientific research, and medical analysis equipment industries.&nbsp; Our Carson City products include high reliability fractional horsepower DC motors designed for
harsh environments, primarily for the aerospace and medical markets.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp; </p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 4 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In 2010, the top
20 customers accounted for 88% of our sales, compared to 85% in 2009.&nbsp; In 2010,
our two largest customers accounted for 60% of our sales with the largest
customer accounting for 40% of our sales.&nbsp; This compares to 2009 when our two
largest customers accounted for 51% of our sales with the largest customer
accounting for 31% of our sales.&nbsp; Some of our larger customers include Smith
and Nephew, Medtronic, Sullivan Schein, Thermo Fisher Scientific and Monogram
Systems.&nbsp; In many cases, including our two largest customers, disclosure of
customer names is prohibited by confidentiality agreements with such entities.&nbsp;
While we have no plans to discontinue the sales relationships with our existing
significant customers, in December, 2009 our largest
customer informed us that is was in the process of developing, and planned to
eventually manufacture, its own surgical hand pieces which are functionally
comparable to the two products currently provided to the customer by the
Company.&nbsp; Pro-Dex has been the exclusive manufacturer of these products since
they were developed.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We currently provide the Customer with two products (&#147;Product
A&#148; and &#147;Product B&#148;) and repair services for such products.&nbsp;
Total revenue shipped in the last two fiscal years by each of these categories
is as follows:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=485
 style='width:75%;margin-left:4.65pt;border-collapse:collapse' id="table15">
		<tr style='height:17.25pt'>
			<td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Revenues during the 12
  months ended</p></td>
			<td valign=top style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Average % of Total</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			<u>6/30/2010</u></p></td>
			<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			<u>6/30/2009</u></p></td>
			<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Product A</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$4,398,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$2,851,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>46%</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Product B</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$3,965,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$2,717,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>42%</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Repairs</p>
			</td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$905,000
			</p></td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$962,000
			</p></td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>12%</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$9,268,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$6,530,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The customer has indicated that it has successfully
developed, tested, and released its version of Product A and is currently
shipping such product to new accounts.&nbsp; The customer has also indicated that it
intends to continue to purchase from Pro-Dex sufficient levels of Product A to
support replacement units for its existing customers in the U.S. and Europe
through at least the end of calendar year 2011 and will also use the Pro-Dex
Product A for all requirements in the South American market through approximately
the end of fiscal year 2012.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Regarding Product B, a more complex device, the customer
has indicated that the development and testing of that Product has been less
successful and that the Company can expect continued orders from the customer
for Product B through the end of calendar year 2011.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Lastly, the customer has indicated that it intends to
continue to use Pro-Dex&#146;s repair services for all Pro-Dex products for an
undetermined period, except in South America, where it will purchase components
from Pro-Dex to do its own repairs locally.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As a result of the foregoing, we expect that approximately one-third
of the revenue attributable to this customer during calendar year 2011 could
move toward them.&nbsp; However, the customer is not obligated to abide by the
timetables it has currently expressed to us or to update us as to the status of
its product development efforts.&nbsp; Accordingly, we are unable to know or predict
the status of the customer's initiative on an ongoing basis.&nbsp; The customer
could accelerate, delay or terminate its transition to its own products at any
time and without notice to us, which could have a further material impact on
our revenues.&nbsp; The identity of the customer is protected by a confidentiality
agreement.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The majority of the raw materials and components used to manufacture our
products are purchased from various suppliers and are available from several
sources. Precipart Corporation, Tyco Precision Interconnect, Danaher and
Transicoil are some examples of our key suppliers.&nbsp; We have no exclusive
arrangements with any of our suppliers, but in several instances only one
supplier is used for certain high-value purchased components.&nbsp; We consider our
relationships with our suppliers and manufacturers to be good.&nbsp; We do not
intend to terminate any such relationship at this time, nor does management
have knowledge that any supplier or manufacturer intends to terminate its
relationship with us.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 5 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our commitment to product design, manufacturing and quality systems are
supported by our compliance with the several regulatory agency requirements and
standards. Our Carson City, NV facility is Certified to ISO 9001:2003. In our Irvine, CA facility, we hold a US FDA Establishment Registration and a State of California Device Manufacturing License (Dept of Public Health Food and Drug Branch). In
addition our Irvine facility is Certified to ISO 13485:2003, Medical Device
Directive 93/42/EEC &#150; Annex II, and Canadian Medical Device Conformity
Assessment System (CMDCAS).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>At the present time, we are generally able to fill orders for recurring
product within 60 days from initial order receipt.&nbsp; At June 30, 2010, we had a
backlog, including orders for delivery beyond 60 days, of $11.2 million
compared with a backlog of $9.8 million at June 30, 2009.&nbsp; We expect to ship
most of our backlog in fiscal year 2011 and the remainder in fiscal year 2012.&nbsp;
The increase from June 2009 is related to orders by our largest customer as
they build inventory for 2011 shipments (see Note 8 of the consolidated
financial statements included elsewhere in this report). &nbsp;We experience some
seasonal fluctuations in our new order bookings as increases in our fiscal
second quarter orders correspond to new calendar year advance orders from our
major customers. We may experience variability in our new order bookings due to
the timing of major new product launches and customer planned inventory
builds.&nbsp; However, we do not typically experience seasonal fluctuations in our
shipments and revenues.</p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b>&nbsp;</b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b>Competition</b>&nbsp;
</p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i>The
markets for products in the healthcare, fractional motors, motion control and
factory automation industries are intensely competitive, and we face significant
competition from a number of different sources.&nbsp; Several of our competitors
have significantly greater name recognition as well as substantially greater
financial, technical, product development and marketing resources than us.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We
compete in all of our markets with other major healthcare, fractional motors, motion
control and factory automation related companies.&nbsp; As a provider of outsourced
services, we also compete with our customers&#146; own internal development and
manufacturing groups.&nbsp; Competitive pressures and other factors, such as new
product or new technology introductions by us or our competitors, may result in
price or market share erosion that could have a material adverse effect on our
business, results of operations and financial condition. &nbsp;Also, there can be no
assurance that our products and services will achieve broad market acceptance
or will successfully compete with other products targeting the same customers.
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Research
and Development </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We conduct research and development activities to both maintain and
improve our market position. &nbsp;Our research and development effort involves the
design and manufacture of products that perform specific applications for our existing
and prospective customers.&nbsp; We continue to target our research and development
expenses toward three goals:</p>
<ul>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;text-autospace:none; margin-right:0in; margin-top:0in'>expanding our knowledge base in the medical device, fractional
motor and motion control industry to solidify our products with current
customers and expand our customer base;</p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;text-autospace:none; margin-right:0in; margin-top:0in'>general technical advances; and
	</p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;text-autospace:none; margin-right:0in; margin-top:0in'>enhancements of current product lines.
	</p></li>
</ul>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We may share research and development costs with our customers by billing
for non-recurring engineering expenses. The fees received for non-recurring
engineering expenses do not, however, represent a significant portion of our
revenue.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>In the year ended June 30, 2010, $2,480,000 was expensed for research and
development; a decrease of $310,000 from the $2,790,000 expensed in the year
ended June 30, 2009.&nbsp; The decrease was attributable to decreased labor and
associated costs.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 6 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Employees </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>At June 30, 2010, we had 120 full-time employees compared to 127 full-time
employees at June 30, 2009.&nbsp; At June 30, 2010, there were 86 persons employed
at the Irvine location, 25 persons employed at the Carson City location and 9 persons
employed at the Beaverton location.&nbsp; &nbsp;At June 30, 2009, there were 89 persons
employed at the Irvine location, 29 persons employed at the Carson City
location and 9 persons employed at the Beaverton location.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>None of our employees are a party to any collective bargaining agreements
with us. &nbsp;We consider our relationships with our employees to be good. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Government
Regulations </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our manufacture and distribution of medical and dental devices are
subject to a number of state and federal regulatory bodies, including state
dental boards and the Food and Drug Administration (&quot;FDA&quot;). The
statutes, regulations, administrative orders, and advisories that affect our
businesses are complex and subject to diverse, often conflicting,
interpretations. While we make every effort to maintain full compliance with
all applicable laws and regulations, we are unable to eliminate an ongoing risk
that one or more of our activities may at some point be determined to have been
non-compliant. The penalties for non-compliance could range from an
administrative warning to termination of a portion of our business.&nbsp; Furthermore,
even if we are subsequently determined to have fully complied with applicable
laws or regulations, our costs to achieve such a determination and the intervening
loss of business could adversely affect or even terminate a portion of our
business. A change in such laws or regulations at any time may have an adverse
effect on our operations. Notwithstanding the risks inherent in our business,
management believes that our operations are in compliance with applicable laws
and regulations. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The FDA regulates our medical and dental products as Class 1, Class 2 and
Class 3 medical devices.&nbsp; The FDA has broad enforcement powers to recall and
prohibit the sale of products that do not comply with federal regulations, and
to order the cessation of non-compliant processes. No claim has been made to
date by the FDA regarding any of our products or processes.&nbsp; Nevertheless, as
is common in the industry, certain of our products and processes have been the
subject of routine governmental reviews and investigations. While our
management believes that our products and processes fully comply with
applicable laws and regulations, we are unable to predict the outcome of any
such investigation or review, pending its completion. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We believe that our business is conducted in a manner consistent with
Environmental Protection Agency (&#147;EPA&#148;) and other agency regulations governing
disposition of industrial waste materials.&nbsp; While we believe that our products
and processes fully comply with applicable laws and regulations, we are unable
to predict the outcome of any investigation or review which may in the future
be undertaken with respect to our products or processes. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our management believes that we follow Good Manufacturing Practices for
all of our products at each of our locations. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Patents, Trademarks, and
Licensing Agreements </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in' align="justify">We hold patents relating to intraosseous dental anesthesia delivery, multi-axis
motion controllers and miniature rotary drive products.&nbsp; Our patents have
varying expiration dates.&nbsp; The near term expiration of the patents, if any, is
not expected to cause any change in the Company&#146;s revenue-generating operations
as the revenue from the products associated with those patents would not be
material.</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 7 -</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We believe that the use of the patents acquired in connection with our 1995
acquisitions of Oregon Micro Systems and Micro Motors, as well as the patents
acquired with our intraosseous dental anesthesia delivery (&#147;Intraflow&#148;)
acquisition in 2005, do not infringe upon the intellectual property of any
third party.&nbsp; We are unable to assess the validity, scope, or defensibility of
our patents with any degree of certainty, and any challenge to or claim of
infringement relating to our patents could materially and adversely affect our
business and results of operations.</p>
<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;page-break-after:avoid;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;text-align:left;page-break-after:
auto;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We have certain trademarks relating to our products, including OMS-EZ&trade;,
and The Company in Motion&trade;.&nbsp; We have filed for federal trademark protection for
Pro-Dex, OMS, and Intraflow. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We have not entered into any licensing or franchising agreements for
revenue generating purposes. We had one royalty agreement in place for a
previously designed product, which terminated in fiscal year 2010.&nbsp; The income
from this royalty agreement is reflected in the Consolidated Financial
Statements and the Notes thereto included elsewhere in this report as &#147;other
income&#148; and not &#147;revenue.&#148; &nbsp;We earned and received $44,000 in royalty payments
in fiscal year 2010, compared to $14,000 in royalty payments in 2009.&nbsp; </p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b>&nbsp;</b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b>&nbsp;</b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<a
name="Risk_Factors"></a><b>Item 1A.&nbsp;&nbsp; RISK FACTORS</b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b>&nbsp;</b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b>We face
significant uncertainty in the industry due to government healthcare reform.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:3.75pt;text-align:justify;text-indent:
..5in'>Political, economic and regulatory influences are subjecting the
healthcare industry to fundamental changes. President Obama recently signed
federal legislation enacting sweeping reforms to the U.S. healthcare industry,
including mandatory health insurance, reforms to Medicare and Medicaid, the
creation of large insurance purchasing groups, new taxes on medical equipment
manufacturers and other significant modifications to the healthcare delivery
system. Due to uncertainties regarding the ultimate features of the new federal
legislation and its implementation, we cannot predict what impact it may have
on us, our customers or our industry. &nbsp;A material amount of our sales could be
subject to the $20 billion medical device tax included in the 2010 healthcare
reform legislation. &nbsp;The 2.3% tax is levied on the total domestic sales of Class
I, II and III medical devices.&nbsp; The tax is based on the revenues of a company,
regardless of whether a company generates a profit.&nbsp; The excise tax is
scheduled to go into effect January 1, 2013.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:3.75pt;text-align:justify;text-indent:
..5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Our
operations are subject to a number of complex government regulations, the
violation of which could have a material adverse effect on our business. </b>
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>Our manufacture and distribution of medical and dental devices are
subject to a number of state and federal regulatory bodies, including state
dental boards and the Food and Drug Administration (&quot;FDA&quot;). The
statutes, regulations, administrative orders, and advisories that affect our
businesses are complex and subject to diverse, often conflicting,
interpretations. While we make every effort to maintain full compliance with
all applicable laws and regulations, we are unable to eliminate an ongoing risk
that one or more of our activities may at some point be determined to have been
non-compliant. The penalties for non-compliance could range from an
administrative warning to termination of a portion of our business.&nbsp;
Furthermore, even if we are subsequently determined to have fully complied with
applicable laws or regulations, our costs to achieve such a determination and
the intervening loss of business could adversely affect or even terminate a portion
of our business. A change in such laws or regulations at any time may have an
adverse effect on our operations. Notwithstanding the risks inherent in our
business, management believes that our operations are in compliance with
applicable laws and regulations. </p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 8 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The FDA regulates our medical and dental products as Class 1, Class 2 and
Class 3 medical devices.&nbsp; The FDA has broad enforcement powers to recall and
prohibit the sale of products that do not comply with federal regulations, and
to order the cessation of non-compliant processes. No claim has been made to
date by the FDA regarding any of our products or processes.&nbsp; Nevertheless, as
is common in the industry, certain of our products and processes are from time
to time subject to routine governmental reviews and investigations. While our
management believes that our products and processes fully comply with
applicable laws and regulations, we are unable to predict the outcome of any
such investigation or review, pending its completion. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We believe that our business is conducted in a manner consistent with
Environmental Protection Agency (&#147;EPA&#148;) and other agency regulations governing
disposition of industrial waste materials.&nbsp; While we believe that our products
and processes fully comply with applicable laws and regulations, we are unable
to predict the outcome of any investigation or review which may in the future
be undertaken with respect to our disposition of industrial waste materials.&nbsp;
If any of our products, processes or other operations are found to be in
violation of government regulations, it could expose us to claims, liabilities
and remedial obligations that could have a material adverse effect on our
business.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:3.75pt'>&nbsp;</p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b>We face
significant competition from a number of different sources, which could negatively
impact our results of operations and business conditions.&nbsp; &nbsp;</b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i>The
markets for healthcare, factory automation and small motor manufacturing
industries are intensely competitive, and we face significant competition from
a number of different sources.&nbsp; Several of our competitors have significantly
greater name recognition as well as substantially greater financial, technical,
product development and marketing resources than us.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We
compete in all of our markets with other major healthcare, factory automation
and small motor manufacturing related companies. As a provider of outsourced
services, we also compete with our customers&#146; own internal development groups.&nbsp;
Competitive pressures and other factors, such as new product or new technology
introductions by us or our competitors may result in price or market share
erosion that could have a material adverse effect on our business, results of
operations and financial condition. Also, there can be no assurance that our
products and services will achieve broad market acceptance or will successfully
compete with other products.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>Our
quarterly results can fluctuate significantly from quarter to quarter, which
may negatively impact the price of our shares and/or cause significant
variances in the prices at which such shares trade.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i>Our
revenues have fluctuated in the past, and may fluctuate in the future from
quarter to quarter and period to period, as a result of a number of factors
including, without limitation: the size and timing of orders from customers;
the length of new product development cycles; market acceptance of new
technologies; the extent and timing of eligible product returned for repair or
replacement under warranty coverage;&nbsp; changes in pricing policies or price
reductions by us or our competitors; the timing of new product announcements
and product introductions by us or our competitors; the financial stability of
major customers; our success in expanding our sales and marketing programs; acceleration
or deferrals of customer orders and deliveries; changes in our strategy;
personnel changes; and general market/economic factors. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Because
a significant percentage of our expenses are relatively fixed, a variation in
the timing of sales can cause significant fluctuations in operating results from
quarter to quarter. As a result, we believe that interim period-to-period
comparisons of our results of operations are not necessarily meaningful and
should not be relied upon as indications of future performance. Further, our
historical operating results are not necessarily indicative of future
performance for any particular period.&nbsp; </p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>Due to all of the foregoing factors, it is possible that in some future quarter(s),
our operating results may be below the expectations of public market analysts
and investors. In such event, the price of our Common Stock would likely be
materially adversely affected.</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 9 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>A
substantial portion of our business is derived from our three core business
areas that, if not serviced properly, may result in a material adverse impact upon
our business, results of operations and financial condition.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We
currently derive a substantial part of our net revenues from sales of our medical
device, motion control and small motor products and related services. &nbsp;We
believe that a primary factor in the market acceptance of our product and
services is the value that is created for our customers by those products and related
services. Our future financial performance will depend in large part on our
ability to continue to meet the increasingly sophisticated needs of our
customers through the timely development, successful introduction and
implementation of new and enhanced products and services. We have historically
expended a significant percentage of our net revenues on product development
and believe that significant continued product development efforts will be
required to sustain our growth. Continued investment in our sales and marketing
efforts will also be required to support future growth.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There can be no
assurance that we will be successful in our product development efforts, that
the market will continue to accept our existing products, or that new products
or product enhancements will be developed and implemented in a timely manner,
meet the requirements of our customers, or achieve market acceptance. If new
products or product enhancements do not achieve market acceptance, our
business, results of operations and financial condition could be materially
adversely affected.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>A substantial portion of our
revenue is derived from a small number of customers such that if we were to
lose one, it could have a material adverse effect on our business, financial
condition and results of operations. </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>We have a few
significant customers that contribute a significant portion of our revenue.&nbsp; In
2010, our top 20 customers accounted for 88% of our sales, with our two largest
customers accounting for 40% and 20% of our 2010 sales, respectively.&nbsp; Our loss
of one or more of our large customers could severely impact us, including
having a material adverse effect on our business, financial condition, cash
flows, revenue and results of operations.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In December, 2009 our largest customer informed us that is
was in the process of developing, and planned to eventually manufacture, its
own surgical hand pieces which are functionally comparable to the two products
currently provided to the customer by the Company.&nbsp; Pro-Dex has been the
exclusive manufacturer of these products since they were developed.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We currently provide the Customer with two products (&#147;Product
A&#148; and &#147;Product B&#148;) and repair services for such
products.&nbsp; Total revenue shipped in the last two fiscal years by each of these
categories is as follows:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=485
 style='width:75%;margin-left:4.65pt;border-collapse:collapse' id="table16">
		<tr style='height:17.25pt'>
			<td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Revenues during the 12
  months ended</p></td>
			<td valign=top style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>Average % of Total</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			<u>6/30/2010</u></p></td>
			<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			<u>6/30/2009</u></p></td>
			<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Product A</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$4,398,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$2,851,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>46%</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Product B</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$3,965,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$2,717,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>42%</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Repairs</p>
			</td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$905,000
			</p></td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$962,000
			</p></td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>12%</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$9,268,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$6,530,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 10 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The customer has indicated that it has successfully
developed, tested, and released its version of Product A and is currently
shipping such product to new accounts.&nbsp; The customer has also indicated that it
intends to continue to purchase from Pro-Dex sufficient levels of Product A to
support replacement units for its existing customers in the U.S. and Europe
through at least the end of calendar year 2011 and will also use the Pro-Dex
Product A for all requirements in the South American market through approximately
the end of fiscal year 2012.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Regarding Product B, a more complex device, the customer
has indicated that the development and testing of that Product has been less
successful and that the Company can expect continued orders from the customer
for Product B through the end of calendar year 2011.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Lastly, the customer has indicated that it intends to
continue to use Pro-Dex&#146;s repair services for all Pro-Dex products for an
undetermined period, except in South America, where it will purchase components
from Pro-Dex to do its own repairs locally.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As a result of the foregoing, we expect that approximately
one-third of the revenue attributable to this customer during calendar year
2011 could move toward them.&nbsp; However, the customer is not obligated to abide
by the timetables it has currently expressed to us or to update us as to the
status of its product development efforts.&nbsp; Accordingly, we are unable to know
or predict the status of the customer's initiative on an ongoing basis.&nbsp; The
customer could accelerate, delay or terminate its transition to its own
products at any time and without notice to us, which could have a further
material impact on our revenues.&nbsp; The identity of the customer is protected by
a confidentiality agreement.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:12.0pt;text-align:justify'>
<b>We have recently
violated certain credit facility covenants and risk violating additional credit
facility covenants in the future, which could result in an event of default
under our credit facilities and in the acceleration of all amounts owing under
all of our credit facilities, the loss of one or more of credit facilities and
the need for us to seek alternative financing.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:12.0pt;text-align:justify;text-indent:
..5in'>Our credit facilities with our banks contain various covenants, including
certain covenants concerning our financial performance.&nbsp; The failure to
comply with any one or more of these covenants could result in an event of
default, the acceleration of all amounts due, and the termination of each such
credit facility.&nbsp; In addition, each of our credit facilities with Wells
Fargo and Union Bank contain cross-default provisions that result in a default
under one facility causing an immediate default under the other facility.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:12.0pt;text-align:justify;text-indent:
..5in'>Our most recent defaults under both our Wells Fargo facility and our
Union Bank facility occurred in fiscal years 2009 and 2010.&nbsp; Historically, on
those occasions where we have failed to comply with our credit facility
covenants, we have been granted waivers of the applicable covenants by our banks.&nbsp;
However, there can be no assurance that similar waivers will be granted in the
future.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:12.0pt;text-align:justify;text-indent:
..5in'>Any future default under any of our credit facilities, if not waived,
could cause the entire amount owing under one or all facilities to become
immediately due and payable, the loss of one or more of credit facilities and possibly
the need for us to seek alternative financing.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";background:white'>
<b>The global economic environment may
impact our business, operating results or financial&nbsp;condition.</b> </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:.25in;text-align:justify;text-indent:.5in'>Changes
in the global economic environment have caused a general tightening in the
credit markets, lower levels of liquidity, increases in rates of default and
bankruptcy, and extreme volatility in credit, equity and fixed income markets.
These macroeconomic developments could negatively affect our business,
operating results or financial condition in a number of ways. For example,
current or potential customers may be unable to fund&nbsp;purchases of our
products, which could cause them to delay, decrease or cancel purchases of our
products and services or to not pay us or to delay paying us for previously
purchased products and services. In addition, financial institution failures
may cause us to incur increased expenses or make it more difficult either to
utilize our existing debt capacity or otherwise obtain financing for our
operations, investing activities (including the financing of any future
acquisitions), or financing activities (including the timing and amount of any
repurchases of our common stock or debt we may make in the future).&nbsp;
Additional risks and uncertainties not currently known to us or that we
currently deem to be immaterial also may materially and adversely affect our
business, financial condition or operating results.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";background:white'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 11 -</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>The
industry in which we operate is subject to significant technological change and
any failure or delay in addressing such change could adversely affect our
competitive position or could make our current products obsolete.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i>
</b>The
healthcare, factory automation and small motor markets are generally
characterized by rapid technological change, changing customer needs, frequent
new product introductions, and evolving industry standards. The introduction of
products incorporating new technologies and the emergence of new industry
standards could render the Company's existing products obsolete and
unmarketable. There can be no assurance that we will be successful in
developing and marketing new products that respond to technological changes or
evolving industry standards.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; New
product development requires significant research and development expenditures
that we have historically funded by sales growth.&nbsp; Any significant decrease in
revenues or research funding could impair our ability to respond to technological
advances in the marketplace and to remain competitive. If we are unable, for
technological or other reasons, to develop and introduce new products in a
timely manner in response to changing market conditions or customer
requirements, our business, results of operations and financial condition may
be materially adversely affected.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In response to
increasing market demand, we are currently targeting new markets, developing
new products and updating existing products. There can be no assurance that we
will successfully access new markets, develop these new products or that these
products will operate successfully, or that any such development, even if
successful, will be completed concurrently with or prior to the introduction of
competing products.&nbsp; Any such failure or delay could adversely affect our
competitive position or could make our current products obsolete.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>We face
risks and uncertainties associated with potential litigation by or against us,
which could have a material adverse effect on our business, results of
operations and financial condition<font style="font-size: 10.0pt">. </font></b>
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<i>&nbsp;</i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We
continually face the possibility of litigation as either a plaintiff or a
defendant.&nbsp; It is not reasonably possible to estimate the awards or damages, or
the range of awards or damages, if any, that we might incur in connection with
such litigation. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Many
of our products are complex and technologically advanced.&nbsp; Such products
may, from time to time, be the subject of claims concerning product performance
and construction, including warranty claims.&nbsp;&nbsp; While we are committed
to correcting such problems as soon as possible, there is no assurance that
solutions will be found on a timely basis, if at all, to satisfy customer
demands and avoid potential claims or litigation.&nbsp; Also, due to the
location of our facilities, as well as the nature of our business activities, there
is a risk that we could be subject to litigation related to environmental
remediation claims.&nbsp; We are currently one of 17 named defendants in a case
concerning remediation of alleged ground water contamination in the Orange County (California) Groundwater South Basin.&nbsp; Our liabilities, as well as our costs of
defending, monitoring and concluding our involvement in this case are
uncertain, and those costs cannot now be estimated. (See the discussion under
Item 3 of this report for additional details regarding this litigation matter).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
uncertainty associated with potential litigation may have an adverse impact on
our business. In particular, litigation could impair our relationships with
existing customers and our ability to obtain new customers. Defending or
prosecuting litigation could result in a diversion of management's time and
attention away from business operations, which could have a material adverse
effect on our business, results of operations and financial condition.&nbsp; There
can be no assurance that litigation would not result in liability in excess of
our insurance coverage, that our insurance will cover such claims or that
appropriate insurance will continue to be available to us in the future at
commercially reasonable rates.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;</p>
<div>
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			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 12 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>Our
products may be subject to product liability legal claims which may cost us
significant amounts in both money and management time and resources</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We
maintain insurance to protect against claims associated with the use of our
products, but there can be no assurance that our insurance coverage will
adequately cover any claim asserted against us. Our products are used in
industries (including, but not limited to, aircraft, medical and dental) where
the malfunction of one of our products could subject us to claims regarding
death or serious bodily injury.&nbsp; A successful claim brought against us in
excess of our insurance coverage could have a material adverse effect on our
business, results of operations and financial condition.&nbsp; Even unsuccessful
claims could result in the expenditure of funds in litigation and management
time and resources.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There can be no
assurance that we will not be subject to product liability claims, that such
claims will not result in liability in excess of our insurance coverage, that
our insurance will cover such claims or that appropriate insurance will
continue to be available to us in the future at commercially reasonable rates. Such
claims or the unavailability of appropriate insurance could have a material
adverse affect on our business, results of operations and financial condition.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>We rely
heavily on our proprietary technology, which if not properly protected or
deemed invalid, could have a material adverse effect on our business, results
of operations and financial condition.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </i>We
are dependent on the maintenance and protection of our intellectual property
and rely on exclusive development and supply agreements, confidentiality
procedures, and employee nondisclosure agreements to protect our intellectual
property. </p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There
can be no assurance that the legal protections and precautions taken by us will
be adequate to prevent misappropriation of our technology or that competitors
will not independently develop technologies equivalent or superior to ours.
Further, the laws of some foreign countries do not protect our proprietary
rights to as great an extent as do the laws of the United States and are often
not enforced as vigorously as those in the United States</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We do not believe
that our operations or products infringe on the intellectual property rights of
others. However, there can be no assurance that others will not assert
infringement or trade secret claims against us with respect to our current or
future products.&nbsp; Successful assertions or claims by others could require us to
enter into a license agreement or royalty arrangement with the party asserting
the claim or to cease our use of the infringing technology, any of which could
have a material adverse effect on our business, results of operations and
financial condition. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify;page-break-after:
avoid'><b>Our failure to manage changing sales levels could harm us by having a
material adverse effect on our business and results of operations.</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify;page-break-after:
avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We
have in the past experienced periods of growth that have placed, and may in the
future place, a significant strain on our resources. We also anticipate
expanding our overall production, development, marketing, sales, management and
training capacity as market demand requires.&nbsp; In the event we are unable to
identify, hire, train and retain qualified individuals in such capacities
within a reasonable timeframe, such failure could have a material adverse
effect on us. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify;page-break-after:
avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In
addition, our ability to manage future changes in the scope of our operations
or personnel may depend on significant expansion or contraction of our production,
research and development, marketing and sales, management, and administrative
and financial capabilities. &nbsp;The ineffective management of change in the
business could have a material adverse effect on our business, results of
operations and financial condition.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify;page-break-after:
avoid'>&nbsp;</p>
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			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 13 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>
<b>Our
operations are dependent upon our key personnel. If such personnel were to
leave unexpectedly, we may not be able to execute our business plan.</b><font style="font-size: 10.0pt">
</font>&nbsp;&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Our
future performance also depends in significant part upon the continued service
of our key technical and senior management personnel, many of whom have been
with us for a significant period of time.&nbsp; We maintain term key man life
insurance policies for the CEO and the head of the Beaverton operations.&nbsp;
Because we have a relatively small number of employees when compared to other
leading companies in the same industry, our dependence on maintaining our
relationship with key employees is particularly significant. &nbsp;We are also
dependent on our ability to attract and retain high quality personnel,
particularly in the areas of product development, operations management,
marketing and finance. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A
high level of employee mobility and the aggressive recruiting of skilled
personnel characterize the healthcare and motion control industries.&nbsp; There can
be no assurance that our current employees will continue to work for us.&nbsp; Loss
of services of key employees could have a material adverse effect on our
business, results of operations and financial condition. Furthermore, we may
need to grant additional stock options to key employees and provide other forms
of incentive compensation to attract and retain such key personnel.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>The failure to maintain the
market price of our common stock may affect our ability to remain a
publicly-traded company on the NASDAQ exchange.</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The
minimum bid price for our publicly traded common stock was below $1.00 for a
significant period of time throughout 2008, 2009 and 2010, ultimately resulting
in us effecting a 1-for-3 split of our common stock on June 17, 2010 to
increase our stock price to satisfy the $1.00 minimum bid price listing
requirement of the Nasdaq Capital Market.&nbsp; Notwithstanding the increased
price of our common stock that resulted from the reverse split, our future
performance, general market conditions and other factors could result in us
failing to satisfy the listing standards of the Nasdaq Capital Market in the
future.&nbsp; If our common stock were to be delisted from the Nasdaq Capital
Market, our shareholders may find it difficult to either dispose of, or to
obtain quotations as to the price of, our common stock.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>We are
subject to changes in and interpretations of financial accounting matters that
govern the measurement of our performance, compliance with which could be
costly and time consuming</b>.<font style="font-size: 10.0pt"> </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in' align="justify">We are subject to changes in and interpretations of financial
accounting matters that govern the measurement of our performance. Based on our
reading and interpretations of relevant guidance, principles or concepts issued
by, among other authorities, the American Institute of Certified Public
Accountants, the Financial Accounting Standards Board, and the United States
Securities and Exchange Commission, our management believes our performance,
including current sales contract terms and business arrangements, have been
properly reported. However, there continue to be issued interpretations and
guidance for applying the relevant standards to a wide range of contract terms
and business arrangements that are prevalent in the industries in which we
operate. Future interpretations or changes by the regulators of existing
accounting standards or changes in our business practices could result in
future changes in our accounting policies and practices that could have a material
adverse effect on our business, financial condition, cash flows, revenue and
results of operations.&nbsp; </p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
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			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 14 -</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Our
evaluation of internal controls and remediation of potential problems is costly
and time consuming and could expose weaknesses in financial reporting. </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The
regulations implementing Section 404 of the Sarbanes-Oxley Act of 2002, as
amended, require management's assessment of the effectiveness of the Company's
internal control over financial reporting.&nbsp; This process is expensive and time
consuming, and requires significant attention of management. &nbsp;Management can
give no assurance that material weaknesses in internal controls will not be
discovered. If a material weakness is discovered, corrective action may be time
consuming, costly and further divert the attention of management.&nbsp; The
disclosure of a material weakness, even if quickly remedied, could reduce the
market's confidence in our financial statements and harm our stock price,
especially if a restatement of financial statements for past periods is
required. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<a name="Item_1B"></a><b>Item
1B.&nbsp; Unresolved Staff Comments</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>None.&nbsp;
<a name=Properties></a></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Item 2.&nbsp;&nbsp;
Description of Property </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our executive offices and Irvine manufacturing facility are located at 2361 McGaw Avenue, Irvine, California 92614.&nbsp; We lease the 28,000 square foot facility from
an unrelated third party at a base monthly lease rate of $36,000 through April 2018,
with an option to terminate early in April 2015.&nbsp; The building is a one-story
stand-alone structure of concrete &#147;tilt-up&#148; construction, approximately 25
years old and in good condition.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our Beaverton office and manufacturing facility is located at 15201 N.W. Greenbrier Parkway, B-1 Ridgeview, Beaverton, Oregon 97006.&nbsp; The Company leases
the 7,500 square foot facility from an unrelated third party, at a base monthly
lease rate of $6,300 through April 2014.&nbsp; The building is a one-story suite in
a 20-year-old industrial office complex and in good condition.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Our Carson City office and manufacturing facility is located at 2950 Arrowhead Drive, Carson City , Nevada 89708.&nbsp; We purchased 4.4 acres of real property and a 20,000 square
foot industrial building and related improvements at this location for
$2,200,000 in March 2006 in connection with our acquisition of Astromec.&nbsp; The
building is a two-story building of concrete block construction and in good
condition.&nbsp; The purchase was financed with cash on hand and by a 10 year promissory
note and related loan agreement with Union Bank, whereby we borrowed
$1,650,000.&nbsp; This loan was secured by the land and building in Carson City, Nevada.&nbsp; This loan was paid off in full on September 16, 2010.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;We believe that the base monthly rental rates on the leased facilities are
higher than current rents charged for comparable properties in the market area,
but were at comparable values when the leases were entered into.&nbsp; The current
facilities are believed to be adequate for our expected needs.&nbsp; We believe
there is full compliance with applicable state and EPA and other agency environmental
standards at each facility.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<a name="Legal_Proceedings"></a><b>Item
3.&nbsp;&nbsp; Legal Proceedings </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>On June 23,
2008, the Orange County Water District (&#147;OCWD&#148;) filed a complaint in the
Superior Court of the State of California in the County of Orange concerning
remediation of alleged ground water contamination in the Orange County
Groundwater South Basin; <u>Orange County Water District v. Sabic Innovative
Plastics U.S. LLC, et al.</u>, Case No. 00078246.&nbsp; The South Basin underlies parts of Santa Ana, California and adjacent cities.&nbsp; The complaint identifies
17 named defendants, including Pro-Dex, and also designates 400 unnamed Doe
defendants.&nbsp; We moved out of this Santa Ana site in April, 2008 and have no
remaining operations there.&nbsp; Since January 1, 2009, OCWD has named 11
additional defendants by multiple amendments to its complaint.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
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			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 15 -</p>
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		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The complaint
alleges that the defendants contaminated the South Basin with volatile organic
chemicals (&#147;VOCs&#148;) and perchlorate through various activities at properties
each defendant now controls or has controlled in the past.&nbsp; Through its
lawsuit, the OCWD seeks compensatory relief for all its own remedial
activities, and injunctive relief to compel the defendants to undertake
remedial activities in general.&nbsp; The complaint does not, however, specify any
remedial activities that the OCWD has undertaken to date or any remedial
activities that it seeks any particular defendants to undertake.&nbsp; Moreover,
from our investigation of OCWD&#146;s remedial activities to date, we have
determined that the OCWD is in the early stages of its remedial investigation
for the South Basin groundwater contamination.&nbsp; In two recent Case Management
Conferences before the court, OCWD has refused defendants&#146; request to designate
a date by which it will disclose its proposed soil and groundwater cleanup
remedies.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As noted above,
27 other entities are named defendants in this case along with Pro-Dex.&nbsp; While
some are small businesses, others are larger corporations or their
subsidiaries.&nbsp; Further, as this case progresses, the OCWD is likely to add at
least a few more named defendants to the case from the 400 Doe defendants it
has designated in the current complaint.&nbsp; In the indeterminable event that we
would be held liable in the case, OCWD&#146;s total recovery probably would be
allocated among several defendants, each of which would pay only a proportionate
share of that total recovery.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>One of our past
insurers has committed to pay most of our defense costs for the lawsuit, and
has done so to date, while reserving its rights as to whether it will cover any
damages awarded against us, or any settlement payment to which Pro-Dex agrees
to resolve the lawsuit, under past policies issued to us for a three-year
period, March 31, 1983 to March 31, 1986.&nbsp; The policies of these years
have&nbsp;occurrence payment limits of $500,000.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Overall, the
OCWD complaint remains vague, the OCWD is in an early stage of its remedial
activities in the South Basin, the lawsuit is in the early stages of discovery,
one of our insurers has committed to pay most defense costs and has reserved
rights under one&nbsp;three-year set of&nbsp;policies and is continuing to
consider extending coverage to us under other past policies, and any recovery
the OCWD may gain through the lawsuit is likely to be allocated among several
defendants.&nbsp; Therefore, our liabilities, as well as our costs of
defending, monitoring and concluding our involvement in this case are
uncertain, and those costs cannot now be estimated.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>In general, we are from time to time a party to various legal proceedings
incidental to our business, other than the above, none of which we consider may
be material at this time.&nbsp; There can be no certainty that we may not ultimately
incur liability or that such liability will not be material and adverse.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><a name="Item_4.___[Removed_and_Reserved]_">Item 4.&nbsp;&nbsp; [Removed
and Reserved] </a></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>PART
II</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<a name="Item5_Market_for"></a><b>Item
5.&nbsp;&nbsp; Market For Registrant&#146;s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in' align="justify">Our common stock, no par value, is quoted under the symbol
&quot;PDEX&quot; on the automated quotation system of the Nasdaq Capital Market
(&quot;NASDAQ&quot;). The following table sets forth for the quarters indicated
the high and low sales prices as reported by NASDAQ and adjusted for our June
17, 2010 1-for-3 reverse stock split.&nbsp; The quotations reflect inter-dealer
prices, without retail markup, markdown, or commissions, and may not necessarily
represent actual transactions. &nbsp;On September 24, 2010, the last sale price of
our common stock as reported by NASDAQ was $2.30 per share.</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 16 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=298
 style='width:50%;border-collapse:collapse'>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px'>
			<u><b>Quarter&nbsp;Ended</b></u></td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<u><b>High</b></u></td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<u><b>Low</b></u></td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>September&nbsp;30,&nbsp;2008</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>3.39</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>2.40</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>December&nbsp;31,&nbsp;2008</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>2.85</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>1.05</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>March&nbsp;31,&nbsp;2009</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>1.50</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>0.81</p>
			</td>
		</tr>
		<tr style='height:13.05pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>June&nbsp;30,&nbsp;2009</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>1.92</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>0.87</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>September&nbsp;30,&nbsp;2009</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>2.22</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>1.14</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>December&nbsp;31,&nbsp;2009</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>2.25</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>1.20</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>March&nbsp;31,&nbsp;2010</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>2.64</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>1.32</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>June&nbsp;30,&nbsp;2010</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>2.88</p>
			</td>
			<td valign=bottom style='border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="right">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>1.50</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>At June 30, 2010, there were approximately 241 holders of record of our
common stock. This number does not include beneficial owners including holders
whose shares are held in nominee or &quot;street&quot; name.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We have never paid a cash dividend with respect to our common stock, and do
not intend to pay cash dividends in the foreseeable future. &nbsp;The current policy
of our Board of Directors is to retain earnings to provide funds for the
operation and expansion of the business.&nbsp; The Board of Directors, in light of
the circumstances then existing, including our earnings and financial
requirements and general business conditions, will determine future dividends,
if any.&nbsp; There are restrictions associated with our credit facilities on the
Company issuing dividends. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Equity Compensation Plan
Information</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
 style='border-collapse:collapse;border:none' width="100%">
	<tr>
		<td valign=top style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>As of June 30, 2010</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>Plan Category</p>
		</td>
		<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>Number
  of Securities to <br>
		be Issued Upon Exercise <br>
		of Outstanding Options, <br>
		Warrants and
  Rights</p></td>
		<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>Weighted
  Average <br>
		Exercise Price of <br>
		Outstanding Options, <br>
		Warrants and Rights</p></td>
		<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>Number
  of Securities <br>
		Available for Issuance <br>
		Under Equity <br>
		Compensation Plans
  <br>
		(excluding securities <br>
		reflected in column (a))</p></td>
	</tr>
	<tr>
		<td valign=top style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
		</td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>(a)</p>
		</td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>(b)</p>
		</td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>(c)</p>
		</td>
	</tr>
	<tr>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>Plans Approved by
		<br>
		Stockholders</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>193,834</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>$3.93</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>301,349</p>
		</td>
	</tr>
	<tr>
		<td valign=top style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>Total</p>
		</td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>193,834</p>
		</td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>$3.93</p>
		</td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>301,349</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In September
2002, our Board of Directors authorized the repurchase on the open market of up
to 166,667 shares of our outstanding Common Stock at a share price no greater
than $3.75, subject to compliance with applicable laws and regulations.&nbsp; There was
no requirement that we repurchase all or any portion of such shares.&nbsp; The
maximum total value of the repurchase as not to exceed $500,000.&nbsp; From the
inception of the repurchase authorization through the fiscal year-end date of
June 30, 2003, we repurchased 25,233 shares of Common Stock for $43,741, at an
average price of $1.74 per share.&nbsp; No additional shares were repurchased in
fiscal years 2004 through 2008.&nbsp; During fiscal year 2009, we repurchased 73,232
shares of common stock for $133,472, at an average price of $1.83 per share. From
the initiation of the buyback program in 2002 through May 2009, we repurchased an
aggregate of 98,465 shares for $177,213 at an average price of $1.80 per share.
&nbsp;Our Board suspended the buyback authorization in May 2009 and has not set a reinitiation
date for the purchase of our shares pursuant to this program.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<a name="Financial_Data"></a><b>Item
6. Selected Financial Data</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>Not Required.</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 17 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Item 7. Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following discussion and analysis provides information that
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial condition for each of the two
years ended June 30, 2010 and 2009, respectively.&nbsp; This discussion should be
read in conjunction with the Consolidated Financial Statements and the Notes
thereto included elsewhere in this report. This report contains certain
forward-looking statements and information. The cautionary statements included below
and elsewhere in this report should be read as being applicable to all related
forward-looking statements wherever they may appear.&nbsp; Our actual future results
could differ materially from those discussed herein.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>
<b>Critical Accounting Estimates
and Judgments</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Our consolidated
financial statements are prepared in accordance with accounting principles generally
accepted in the United States (&#147;GAAP&#148;).&nbsp; The preparation of our financial
statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues, expenses and related
disclosures.&nbsp; We base our estimates on historical experience and various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources.&nbsp; Actual results may differ from these estimates.&nbsp; The
significant accounting policies that are believed to be the most critical to
fully understanding and evaluating our reported financial results include
revenue recognition, warranty reserve, inventory valuations for slow moving
items, impairment of goodwill, and the recovery of deferred income tax assets.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>
<b>Revenue
Recognition </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 7.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>Revenue on virtually all product
sales is recognized upon shipment to the customer based on its terms of FOB
shipping point, where the risk of loss and title transfer to the customer.&nbsp; We
record sales in accordance with ASC 605 (formerly Staff
Accounting Bulletin No. 104, <i>Revenue Recognition</i>).&nbsp;
Under these guidelines, revenue is recognized when all of the following are
satisfied: persuasive evidence that a sale arrangement exists, delivery of the
product has occurred, the price is fixed or determinable, and payment is
reasonably assured.&nbsp; We sell some of our products with a warranty that provides
for repairs or replacement of any defective parts for a period after the sale.
At the time of the sale, the Company accrues an estimate of the cost of
providing the warranty based on prior experience.&nbsp; The Company recognizes
revenue under research and development agreements as certain deliverables are
met as specified in each development contract. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>There have been
minimal returns for credit, so no reserve for product returns has been
established.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>Inventory</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We determine our
inventory value at the lower of cost (first-in, first-out method) or market
value.&nbsp;&nbsp; We determine a reduced market value of our inventory based on the
aging of inventory on hand.&nbsp; We define &#147;aging of inventory&#148; as inventory that
exceeds an estimated 12 months of usage and exceeds orders on hand.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>Accounts
Receivable </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>We determine the reserve for our accounts receivable by examining the
aging of receivables.&nbsp; We define &#147;aging of receivables&#148; as time passed since (i)&nbsp;the
sale was completed, (ii)&nbsp;revenue was recognized and (iii)&nbsp;the receivable
was established.&nbsp; If the receivable is aged over 90 days old, or has a known
collection risk, it is reserved from anywhere between 10% of its value up to
100% of its value depending on account credit and collection history.&nbsp; </p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify; text-indent:0.5in; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 18 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>Goodwill </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In accordance with ASC 350 (formerly SFAS No. 142,
&#147;Intangible&#151;Goodwill and Other&#148;) intangible assets
with definite lives are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Impairment indicators include, among other conditions, cash flow
deficits, historic or anticipated declines in revenue or operating profit and
adverse legal or regulatory developments. We assess potential impairment
of our goodwill and intangible assets when there is evidence that recent events
or changes in circumstances have made recovery of an asset&#146;s carrying value
unlikely. &nbsp;We also assess potential impairment of our goodwill and intangible
assets on an annual basis during our fiscal fourth quarter, regardless if there
is evidence or suspicion of impairment.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>If it is determined that such indicators are present and
the review indicates that the assets will not be fully recoverable, based on
undiscounted estimated cash flow over the remaining amortization periods, the
carrying values are reduced to estimated fair market value. &nbsp;In
accordance with ASC 350, a two-step impairment test is required to identify
potential goodwill impairment and measure the amount of the goodwill impairment
loss to be recognized. In the first step, the fair value of each reporting unit
is compared to its carrying value to determine if the goodwill is impaired. If
the fair value of the reporting unit exceeds the carrying value of the net
assets assigned to that unit, then goodwill is not impaired and no further
testing is required. If the carrying value of the net assets assigned to the
reporting unit exceeds its fair value, then the second step is performed in
order to determine the implied fair value of the reporting unit&#146;s goodwill and
an impairment loss is recorded for an amount equal to the difference between
the implied fair value and the carrying value of the goodwill. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Determining the fair value of a reporting unit (an intangible
asset) is judgmental and involves the use of significant estimates and
assumptions. We base our fair value estimates on assumptions that we believe
are reasonable but are uncertain and subject to changes in market conditions. &nbsp;For
the purposes of identifying and measuring impairment, goodwill assets are
grouped with other assets and liabilities at the lowest level for which
identifiable cash flows are largely independent of the cash flow of other
assets and liabilities.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We identify two
reporting units for purposes of our annual goodwill impairment testing arising
from our acquisitions of Micro Motors and Astromec </p>
<ul>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:12.0pt;margin-right:0in;margin-bottom:
0in;margin-left:0.25in;margin-bottom:.0001pt;text-align:justify;'>Our Carson City reporting unit corresponds to the operations
resulting from the Astromec acquisition, </p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:12.0pt;margin-right:0in;margin-bottom:
0in;margin-left:0.25in;margin-bottom:.0001pt;text-align:justify;'>Our Irvine reporting unit corresponds to the operations resulting
from the Micro Motors acquisition.&nbsp; </p></li>
</ul>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In determining
if a triggering event has occurred, we consider not only expectations for
growth in the entire US economy, but also expectations for regional growth
specific to our sales markets and specific to our industry and product lines.&nbsp;
While our operating units are influenced by changes in the general economic
outlook of the United States, they are most heavily influenced by changes
specific to the medical device industry.&nbsp; Furthermore, the magnitude of
economic changes within the industry is viewed alongside the outlooks and
forecasts specific to the reporting units to obtain a better sense of the
likelihood that goodwill may be impaired.&nbsp; Declines within the industry&#146;s
outlook are reflected in the unit&#146;s revenue projections.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 19 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>During the
preparation of the fiscal year 2010 financial statements, we determined a
triggering event occurred for Micro Motors as new and replacement revenue
sources for a potential loss of our largest customer had not been completed.&nbsp; During
the preparation of the fiscal year 2010 financial statements we also determined
a triggering event for Astromec as it became apparent that the expected product
synergies and resulting financial benefits from the 2006 Astromec acquisition
were not being realized. &nbsp;(See Note 10 of the consolidated financial
statements).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In estimating
the fair value of the reporting units, we considered the two traditional
approaches to valuation, the market approach and the income (discounted cash
flow &#147;DCF&#148;) approach.&nbsp; The market approach compares the subject company with
guideline publicly-traded companies.&nbsp; Valuation multiples are calculated from
the selected companies to provide an indication of how much a current investor
in the marketplace would be willing to pay for a company with similar
characteristics.&nbsp; The income approach measures the projected cash flows
expected to be realized from the asset.&nbsp; The value of a business is the
expected cash flows discounted to a present value at a discount rate that
considers the degree of risk associated with the realization of the projected
monetary benefits.&nbsp; The cash flow analysis relies upon estimates of the
entity&#146;s future revenue and expenses to ultimately project the future cash
flows resulting from the business activity of each entity. An appropriate
discount rate is reached by calculating the weighted average cost of capital,
or &#147;WACC,&#148; which is determined by the assumptions underlying the Capital Asset
Pricing Model, or &#147;CAPM,&#148; and is considered to reflect the view of &#147;Market
Participants,&#148; as required under ASC 825 (formerly SFAS 157). &nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The material
assumptions relied upon in the analyses used to value the Micro Motors and Astromec
reporting units and goodwill are shown below.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<u>Astromec</u></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Market
Approach </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(a)&nbsp;Nine public
companies were identified that had a range of revenue to value multiples of
between 0.19 times to a high of 1.02 times with a median revenue multiple of
0.43.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(b)&nbsp;Eleven similar open
market transactions were identified that had revenue to value multiples that
ranged from a low of 0.25 to a high of 0.77 with a median revenue multiple of
0.56 </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(c)&nbsp;The low
multiples were used to determine the fair value due to Astromec&#146;s small size
and profitability.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income
Approach </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(a)&nbsp;A discounted
cash flow model was constructed using a ten &#150;year forecast for the reporting
unit to determine a debt-free cash flow forecast.&nbsp; The present value of the
cash flows and residual value were discounted to a present value using the WACC.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.75in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
inputs to the CAPM to determine the cost of equity used in the WACC were:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk free rate of 3.74%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>ii.&nbsp;&nbsp;&nbsp; Relevered
Beta of 1.24</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>iii.&nbsp;&nbsp;&nbsp;Equity
risk premium of 5.18%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>iv.&nbsp;&nbsp;&nbsp;Small cap
stock premium of 6.28%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>v.&nbsp;&nbsp;&nbsp;&nbsp;Reporting
unit risk premium of 2.0%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.75in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
reporting unit&#146;s cost of equity was estimated to be 16.4%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(b)&nbsp;&nbsp;The cost of debt was
6.05% based on Moody&#146;s Baa seasoned bond rate. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(c)&nbsp;&nbsp;Based on the
debt/equity capital structure of the peer group of 83% equity and 17% debt, the WACC was estimated at 15.8%.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 20 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<u>Micro Motors</u></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Market
Approach </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(a)&nbsp;Ten public
companies were identified that had a range of revenue to value multiples of
between 0.20 times to a high of 1.00 times with a median revenue multiple of
0.47.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(b)&nbsp;Eleven similar open
market transactions were identified that had revenue to value multiples that
ranged from a low of 0.25 to a high of 0.77 with a median revenue multiple of
0.56</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(c)&nbsp;The mean multiples
were used to determine the fair value due to Micro Motor&#146;s size.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;punctuation-wrap:simple;
text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income
Approach </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(a)&nbsp;A discounted
cash flow model was constructed using a ten&#150;year forecast for the reporting
unit to determine a debt-free cash flow forecast. &nbsp;The present value of the
cash flows and residual value were discounted to a present value using the WACC.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.75in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
inputs to the CAPM to determine the cost of equity used in the WACC were:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>i.&nbsp;&nbsp;&nbsp;&nbsp;Risk free rate of 3.74%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>ii.&nbsp;&nbsp; Relevered
Beta of 0.85</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>iii.&nbsp;&nbsp;Equity
risk premium of 5.18%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>iv.&nbsp;&nbsp;Small cap
stock premium of 6.28%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:1.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.75in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
reporting unit&#146;s cost of equity was estimated to be 14.4%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(b)&nbsp;The cost of debt was
6.05% based on Moody&#146;s Baa seasoned bond rate. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-indent:-.25in'>(c)&nbsp;Based on the debt/equity capital structure of the peer group of
83% equity and 17% debt, the WACC was estimated at 12.5%.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:24.5pt'>As the fair
value of the equity was below the carrying value of the equity at both Astromec
and Micro Motors, the goodwill was considered impaired and a step 2 analysis
was required.&nbsp; In the step two analysis, it was determined that all the
remaining goodwill for these two reporting units was impaired.&nbsp; Goodwill
impairment associated with Astromec recognized as an operating expense was $1,887,000.
Goodwill impairment associated with Micro Motors recognized as an operating
expense was $1,110,000. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>Long-lived assets</b> </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt; margin-left:0in; margin-right:0in; margin-top:0in'>In accordance with ASC 360
(formerly SFAS&nbsp;No.&nbsp;144, &#147;Accounting for the Impairment or Disposal
for Long-Lived Assets&#148;), we review the recoverability of our long-lived assets,
such as property and equipment, when events or changes in circumstances occur
that indicate the carrying value of the asset group may not be recoverable. The
assessment of possible impairment is based on our ability to recover the
carrying value of the asset or asset group from the expected future pre-tax
cash flows, undiscounted and without interest charges, of the related
operations. If these cash flows are less than the carrying value of such
assets, an impairment loss is recognized for the difference between estimated
fair value and carrying value. The measurement of impairment requires
management to estimate future cash flows and the fair value of long-lived
assets. </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 21 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Given the Company&#146;s
lack of a direct dental distribution channel, in fiscal year 2009 third
quarter, it stopped actively promoting the intraosseous dental anesthesia
delivery product (&#147;Intraflow&#148;) that is based on the intangible asset resulting
from the purchase of certain assets from IntraVantage, Inc. in October
2005.&nbsp; Any substantial future value therefore is derived from the
possibility that a company with a direct dental distribution channel (a &#147;Market
Participant&#148;) might be interested in access to the technology through product
purchases, licenses, acquisition, joint venture, or other means.&nbsp; Given
the current economic environment, the general lack of investment in new
products, the limited number of Market Participants to whom this technology
relates, the time and expense necessary to consummate a transaction, and other
factors considered by management, there is also a significant possibility that
no distribution partner will be found, resulting in effectively no value of the
asset.&nbsp; Given this change in circumstance, in accordance with ASC 360 (formerly SFAS No. 144 &#147;Accounting for the
Impairment or Disposal of Long-Lived Assets.&#148;) management tested the carrying
amount of the intangible asset for recoverability as of March 31, 2009.&nbsp; The
result of management&#146;s analysis (based on several scenarios with varying
probabilities of occurring) was that the asset&#146;s value was impaired and,
accordingly, a charge of $997,000 was taken in the fiscal 2009 third
quarter.&nbsp; As market conditions have not improved and no distribution
partner has been found as of December 31, 2009, management concluded that the
asset&#146;s value was further impaired and, accordingly, a charge for the remaining
value of $140,000 was taken in the fiscal 2010 second quarter. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<table class=MsoNormalTable cellpadding=0 width=526
 style='border-bottom:0px solid #000000; width:100%;border-collapse:collapse'>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-left:1px solid #000000; border-right:1px solid #000000; border-top:1px solid #000000; background:white; border-bottom-style:none; border-bottom-width:medium; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' colspan="5" bordercolor="#000000">
		<p align="center"><b>Carrying&nbsp;Value</b></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-bottom:1px solid #000000; background:white; border-left-style:solid; border-left-width:1px; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:white; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="center" bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>6/30/2009</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:white; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="center" bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Amortization</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:white; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="center" bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Impairment</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:1px solid #000000; border-right:1px solid windowtext; background:white; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="center" bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>6/30/2010</p>
		</td>
	</tr>
	<tr style='height:13.0pt'>
		<td valign=bottom style='background:#CBDBD1;
  border-left-style:solid; border-left-width:1px; border-right-style:none; border-right-width:medium; border-top-style:solid; border-top-width:1px; border-bottom-style:solid; border-bottom-width:1px; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Intangibles&nbsp;-&nbsp;Patents</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:solid; border-top-width:1px; border-bottom-style:solid; border-bottom-width:1px; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="center" bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;147,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:solid; border-top-width:1px; border-bottom-style:solid; border-bottom-width:1px; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="center" bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7,000)</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:solid; border-top-width:1px; border-bottom-style:solid; border-bottom-width:1px; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="center" bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(140,000)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:1px solid; border-bottom:1px solid; border-right:1px solid windowtext; background:#CBDBD1; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' align="center" bordercolor="#000000">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We determined a triggering event occurred with the Carson
City land and building (&#147;the property&#148;) due to the expected undiscounted cash
flows being below the carrying value of the property, indicating impairment.&nbsp;
The fair value is defined pursuant to ASC 820 &#150; <i>Fair Value Measurements</i>
as the price that would be received in an orderly transaction between market
participants at the measurement date.&nbsp; The fair value was estimated based on
market conditions and comparable transactions.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=587
 style='width:100%;border-collapse:collapse'>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-left:1px solid #000000; border-right:1px solid #000000; border-top:1px solid #000000; background:white; padding:1.1pt; height:15pt' colspan="5" align="center">
		<p><b>Carrying&nbsp;Value</b></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-left:1px solid #000000; border-right:medium none #000000; border-top:medium none #000000; background:white; padding:1.1pt; height:15pt; border-bottom-style:none; border-bottom-width:medium'>&nbsp;</td>
		<td valign=bottom style='border-left:medium none #000000; border-right:medium none #000000; border-top:medium none #000000; background:white; padding:1.1pt; height:15pt; border-bottom-style:none; border-bottom-width:medium' align="center">
		<p align="right">6/30/2009</td>
		<td valign=bottom style='border-left:medium none #000000; border-right:medium none #000000; border-top:medium none #000000; background:white; padding:1.1pt; height:15pt; border-bottom-style:none; border-bottom-width:medium' align="center">
		<p align="right">Depreciation</td>
		<td valign=bottom style='border-left:medium none #000000; border-right:medium none #000000; border-top:medium none #000000; background:white; padding:1.1pt; height:15pt; border-bottom-style:none; border-bottom-width:medium' align="center">
		<p align="right">Impairment</td>
		<td valign=bottom style='border-left:medium none #000000; border-top:medium none #000000; border-bottom:medium none; border-right:1px solid windowtext; background:white; padding:1.1pt; height:15pt' align="center">
		<p align="right">6/30/2010</td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-left:1px solid #000000; border-right:medium none #000000; border-top:medium none #000000; background:white; padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Land</p>
		</td>
		<td valign=bottom style='border-left:medium none #000000; border-right:medium none #000000; border-top:medium none #000000; background:white; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;757,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none #000000; border-right:medium none #000000; border-top:medium none #000000; background:white; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none #000000; border-right:medium none #000000; border-top:medium none #000000; background:white; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(478,000)</p>
		</td>
		<td valign=bottom style='border-left:medium none #000000; border-top:medium none #000000; border-bottom:medium none; border-right:1px solid windowtext; background:white; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;279,000&nbsp;</p>
		</td>
	</tr>
	<tr style='height:14.45pt'>
		<td valign=bottom style='border-left:1px solid #000000; border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Building</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;&nbsp;1,470,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;&nbsp; (829,000)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:1px solid #000000; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;641,000&nbsp;</p>
		</td>
	</tr>
	<tr style='height:24.55pt'>
		<td valign=bottom style='border-left:1px solid #000000; border-bottom:1px solid #000000; background:white; padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Accumulated&nbsp;Depreciation</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:white; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(122,000)</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:white; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;(38,000)</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:white; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:1px solid #000000; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;(160,000)</p>
		</td>
	</tr>
	<tr style='height:13.0pt'>
		<td valign=bottom style='border-left:1px solid #000000; border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;Land&nbsp;&amp;&nbsp;Building,&nbsp;net</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,105,000</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;&nbsp;(38,000)</p>
		</td>
		<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp;&nbsp;(1,307,000)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:1px solid #000000; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt' align="right">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>$&nbsp; 760,000&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>Warranties</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our warranty accrual is determined by reviewing the return rates and
warranty repair costs for warranty eligible products.&nbsp; We accrue an amount of
expected repair cost based on these factors projected for the future applicable
warranty period.&nbsp; If actual return rates or repair costs differ from our
estimates, actual results could vary from the projected accrual.&nbsp; The repair
return rates and cost assumptions are reviewed quarterly. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>
<b>Property,
Plant, Equipment and Leasehold Improvements, Net</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment is recorded at
cost and consists of the following: </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=495
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>6/30/2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>6/30/2009</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Audited</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Audited</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Land</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>279,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>757,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Building</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>641,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,470,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Leasehold&nbsp;Improvements</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,286,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,283,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Equipment</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,745,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,620,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,951,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>11,130,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Accumulated&nbsp;Depreciation</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(5,859,000)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(5,149,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:3px double windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;property,&nbsp;plant&nbsp;&amp;&nbsp;equipment,&nbsp;net</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:3px double windowtext; background:#CBDBD1; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:3px double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,092,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:3px double windowtext; background:#CBDBD1; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:3px double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,981,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Depreciation is provided using the straight-line method over the
estimated useful lives of the assets as follows: building - 39 years, equipment
- - 3 to10 years; and leasehold improvements are depreciated over the shorter of
the term of the lease or their estimated useful lives.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>As noted above, the value of the Carson City land and building was
revalued to its current market value in 2010.&nbsp; The land was reduced to $279,000
from $757,000 and the building was reduced to $641,000 from $1,470,000.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>&nbsp;</b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 22 -</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<p style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Stock-Based Compensation</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We are subject to ASC 718 (formerly SFAS
No. 123 (R) <i>Accounting for Stock-Based Compensation</i>, as revised December
2004.)&nbsp; This standard establishes the accounting standards for equity
compensation, and applies to us in the recognition of the cost of stock options
awarded based on the grant-date fair value of those awards. </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>
<b>Income Taxes</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
part of the process of preparing our consolidated financial statements, we are
required to estimate our income taxes in each of the jurisdictions in which we
operate.&nbsp; This process involves estimating the actual current tax
liabilities together with assessing temporary differences resulting from
differing treatment of items for tax and accounting purposes.&nbsp; These
differences result in deferred tax assets and liabilities, which are included
within the consolidated balance sheet.&nbsp; The most significant tax assets
are future deductions from the amortization of intangibles over the next ten
years, inventory reserves and net operating loss carry forwards.&nbsp; Tax
assets also result from net operating losses and research and development tax
credits.&nbsp; We must then assess the likelihood that the deferred tax assets
will be recovered from future taxable income and, to the extent we believe that
recovery is not likely, a valuation allowance must be established.&nbsp; To the
extent we establish a valuation allowance or increase or decrease this
allowance in a period, the impact will be included in the tax provision in the
statement of operations. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant
management judgment is required in determining our provision for income taxes
and the recoverability of our deferred tax asset.&nbsp; Such determination is based primarily
on our historical taxable income, with some consideration given to our
estimates of future taxable income by jurisdictions in which we operate and the
period over which our deferred tax assets will be recoverable.&nbsp; We carry a
valuation allowance against our deferred tax assets and changes in this
allowance are reflected through income tax expense.&nbsp;&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>Year in Review</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>2010 proved to
be a much better year for Pro-Dex following the down year for the world&#146;s
economy and Pro-Dex in fiscal year 2009.&nbsp; Our consolidated sales for 2010 grew
by 10% as compared to 2009, bringing our five year cumulative average growth
back to over 10% per year.&nbsp; Over a longer term, we maintained a cumulative average
growth rate of almost 10% per year since fiscal year 2003.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Our medical
products business resumed its growth in 2010 as sales were over 13% higher than
the previous year.&nbsp; Strong demand from our top two customers and a new product
that we delivered to one of those customers drove the sales increase.&nbsp;
Unfortunately, as discussed elsewhere in this report, in December 2009 we
received notice from our largest customer that it is working to manufacture for
itself the two products that we currently produce for the customer, potentially
reducing our sales to them beginning in calendar year 2011.&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Our motion
control business was particularly adversely affected in 2009 as our high margin
products associated with this business are used by capital equipment providers,
and these orders slowed substantially in our third quarter (January-March
2009).&nbsp; In response to the unfavorable demand environment for these products,
we sensed an opportunity to gain market share in the motion control marketplace
and added additional sales resources in January 2009 to aggressively uncover
and pursue new customer and new sales channel opportunities.&nbsp; Sales levels gradually
increased through the year and ended 2010 at a run rate of approximately 80% of
the sales levels seen before the 2009 downturn. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 23 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Our year-end
backlog of orders remained at the high end of the historical range at $11.2
million, up from $9.8 million at June 2009 and $10.4 million at June 2008.&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The cost control
efforts established in the prior years continued to show positive results.&nbsp; Our
gross margin increased from 32% in 2009 to 36% of sales in 2010, a level not
seen since 2006. &nbsp;Our reported operating costs in 2010 were $11.6 million, up
from $8.3 million in 2009, but as in 2009, were clouded by non-cash impairment
charges.&nbsp; These non-cash charges totaled over $4.4 million dollars in 2010,
consisting of:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<table border="0" style="border-collapse: collapse" width="100%" id="table5">
	<tr>
		<td style="width: 0.5in" valign="top">
		<p align="justify" style="margin-top: 0; margin-bottom: 0">&nbsp;</td>
		<td width="115" valign="top">
		<p align="justify" style="margin-top: 0; margin-bottom: 0">(1)</td>
		<td width="1232" valign="top">
		<p style='margin-bottom:0;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0'>We wrote off the remaining $140,000 of the patent intangible in December
2010 as no strategic distribution partner was found for the product line. </p>
		</td>
	</tr>
	<tr>
		<td style="width: 0.5in" valign="top">
		<p align="justify" style="margin-top: 0; margin-bottom: 0">&nbsp;</td>
		<td width="115" valign="top">
		<p align="justify" style="margin-top: 0; margin-bottom: 0">(2)</td>
		<td width="1232" valign="top">
		<p style='margin-bottom:0;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0'>By the end of fiscal 2010, it became apparent that the expected product
synergies and resulting financial benefits from the 2006 Astromec acquisition
were not being realized.&nbsp; As a result, we determined that the asset was impaired
and wrote off $1.9 million in goodwill associated with the acquisition.</p></td>
	</tr>
	<tr>
		<td style="width: 0.5in" valign="top">
		<p align="justify" style="margin-top: 0; margin-bottom: 0">&nbsp;</td>
		<td width="115" valign="top">
		<p align="justify" style="margin-top: 0; margin-bottom: 0">(3)</td>
		<td width="1232" valign="top">
		<p style='margin-bottom:0;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0'>We also realized the decline in market value of the Carson City land and
building and wrote down that asset&#146;s value by $1.3 million. </p></td>
	</tr>
	<tr>
		<td style="width: 0.5in" valign="top">
		<p align="justify" style="margin-top: 0; margin-bottom: 0">&nbsp;</td>
		<td width="115" valign="top">
		<p align="justify" style="margin-top: 0; margin-bottom: 0">(4)</td>
		<td width="1232" valign="top">
		<p style='margin-bottom:0;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0'>In addition, due to the uncertain outlook of the medical device business
related to the potential reduction in business from a major customer, the
remaining $1.1 million in goodwill from the 1995 acquisition of Micro Motors
was determined to be impaired and written off.&nbsp; </p></td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify'>2009 included a
$997,000 charge for writing down the majority of the value of the patent intangible.
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify'>Without the
impairment charges, operating expenses remained stable at $7.2 million in 2010 and
in 2009.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We continue to
have a full allowance on our $3.0 million in deferred tax assets at the end of
2010, up from $2.1 million at the end of 2009.&nbsp; &nbsp;&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Despite the
reported loss, we significantly improved the Company&#146;s financial position by
generating over $3.2 million in operating cash for the 2010 fiscal year, following
the $1.7 million generated in 2009 and $2.0 million in 2008.&nbsp; Our net debt balance
of $2.2 million from 2009 turned to a net cash balance of $900 thousand as our
cash balances exceeded our debt balances.&nbsp; The cash generated was a result of
normal ongoing operations generating over $1.2 million in pre-tax profitability
in 2010 before consideration of the impairments.&nbsp; We also benefited from a
change in the tax law that allowed us to recover $547,000 in previously
unavailable tax credits.&nbsp; We continue to have nothing borrowed on our credit
line and ended the year with approximately $3.8 million in cash on hand.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>RESULTS OF OPERATIONS </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Results of Operations for
Fiscal Year Ended June 30, 2010, Compared to Fiscal Year Ended June 30, 2009 </b>
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following table sets forth financial data and the percentage of net
revenues regarding the Company's financial position and operating results. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 24 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br
clear=all style='page-break-before:always'></font>
<table class=MsoNormalTable border=0 cellpadding=0 width=620
 style='width:100%;border-collapse:collapse'>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:medium none; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>(In&nbsp;Thousands)</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=3 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
		</td>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=3 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2010</p>
		</td>
		<td colspan=3 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<div style="border-right: 1px solid #000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2009</p>
		</div></td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;sales:</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>23,211&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21,122&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cost&nbsp;of&nbsp;sales</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>14,847&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>64%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>14,374&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>68%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Gross&nbsp;Profit</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>8,364&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>36%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,748&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>32%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Selling,&nbsp;general&nbsp;and&nbsp;administrative&nbsp;expenses</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,670&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>20%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,452&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Intangible&nbsp;and&nbsp;Property&nbsp;Value&nbsp;Impairment</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,444&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>19%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>997&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Research&nbsp;and&nbsp;development&nbsp;costs</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,480&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>11%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,791&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Loss&nbsp;from&nbsp;Operations</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(3,230)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(14%)</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(1,492)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(7%)</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;interest&nbsp;expense&nbsp;and&nbsp;net&nbsp;other&nbsp;income</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>158&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>212&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Benefit&nbsp;for&nbsp;Income&nbsp;Taxes</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(1,130)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(5%)</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(1,100)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(5%)</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Allowance&nbsp;for&nbsp;deferred&nbsp;tax&nbsp;asset</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>710&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,241&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>11%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;Loss</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(2,968)</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(13%)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(2,845)</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(13%)</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Net Sales.</b>&nbsp;&nbsp; Consolidated sales increased 10% or $2,089,000 to $23,211,000
from $21,122,000 for 2010 as compared to 2009.&nbsp; Medical sales were higher by
$2,693,000 or 24%, due to higher sales to our largest customer of $2,737,000 as
that customer continues to build inventory (see Note 8 of the consolidated
financial statements).&nbsp; Shipments to dental customers decreased by $501,000 or 19%,
as we strategically reduced sales of certain low profit products.&nbsp; Sales to
industrial customers decreased by $130,000 or 5%, reflecting a slowdown in our
motion control business primarily in the first six months of fiscal year 2010.&nbsp;
Aerospace sales were up $361,000 or 14%, due to higher commercial aircraft
motor shipments.&nbsp; Sales related to government research related products and
product repairs were down 14%, due primarily to a decline in government agency
related work.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Although selective price increases and decreases were implemented in
response to market conditions, the majority of the sales growth and declines
for each product line is due primarily to changes in sales volume, not the
effect of price changes. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The amount of Pro-Dex total sales to each customer type and the
year-to-year change is noted in the table below:</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=513
 style='width:75%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
  text-autospace:none'>&nbsp;</p></td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Increase/</p>
			</td>
		</tr>
		<tr style='height:13.1pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Sales&nbsp;by&nbsp;customer&nbsp;type&nbsp;($'000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2009</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(Decrease)</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Medical</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13,800&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>11,107&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>24%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Aerospace</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,985&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,624&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>14%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Industrial</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,318&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,448&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(5%)</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Dental</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,119&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,620&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(19%)</p>
			</td>
		</tr>
		<tr style='height:12.35pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Government&nbsp;research&nbsp;and&nbsp;other</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,989&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,324&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(14%)</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;Sales</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>23,211&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>21,123&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>10%&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Gross Profit and Gross Profit Percentage of Sales. &nbsp;</b>Our
consolidated gross profit for 2010 increased $1,616,000 or 24% compared to the
gross profit in the previous year, due to the higher medical sales and improved
Industrial sales mix. &nbsp;Gross profit as a percentage of sales increased to 36%
for the year ended June 30, 2010 compared to 32% for the year ended June 30,
2009.&nbsp; Gross margin as a percentage of sales was positively impacted as a more favorable
sales mix comprised mostly of the increase higher margin medical products and
the decrease in lower margin dental products. Gross profit and gross profit as
a percentage of sales were as follows:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=547
 style='width:75%;border-collapse:collapse' id="table6">
		<tr style='height:12.55pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2009</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Increase</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Gross&nbsp;Profit</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>8,364,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,748,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>24%&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.55pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Gross&nbsp;Profit&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>36%&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>32%&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>&nbsp;</b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 25 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Selling, General and Administrative Costs (S, G&amp;A)</b>.&nbsp; S, G
&amp; A expenses (including $4,444,000 and $997,000 intangible and property
value impairment charges in 2010 and 2009 respectively) increased 67% to $9,113,000
for the year ended June 30, 2010 from $5,449,000 for year ended June 30, 2009.&nbsp;
We had a 7% increase in selling expense mainly due to increased promotion and advertising
($56,000) and increased employee compensation ($19,000).&nbsp; General and
administrative costs were higher by 4% due to increases in employee
compensation ($134,000) offset by reduced consulting costs ($35,000).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>As a percentage of sales, S, G&amp;A costs increased to 39% from 22% for
the year ended June 30, 2010 and 2009, respectively.&nbsp; The increase in G&amp;A
costs related to impairment was 19% and 4% for the years ended June 30, 2010
and 2009 respectively. &nbsp;S, G&amp;A costs were as follows:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=662
 style='width:100%;border-collapse:collapse'>
	<tr style='height:12.35pt'>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
		</td>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2010</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2009</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Increase</p>
		</td>
	</tr>
	<tr style='height:12.35pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Selling</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,382,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,295,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>7%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>General&nbsp;and&nbsp;administrative</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,287,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,157,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.35pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;Intangible&nbsp;asset&nbsp;and&nbsp;property&nbsp;value&nbsp;impairment</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,444,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>997,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>346%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Total&nbsp;Selling,&nbsp;General&nbsp;&amp;&nbsp;Administrative&nbsp;cost</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>9,113,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>5,449,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>67%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.35pt'>
		<td valign=bottom style='background-position: 0% 0%; border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding:1.1pt; background-image:none; background-repeat:repeat; background-attachment:scroll' bgcolor="#CBDBD1">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>S,&nbsp;G&amp;A&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
		</td>
		<td colspan=2 valign=bottom style='background-position: 0% 0%; border-top:medium none; border-left:medium none; border-bottom:1.0pt solid windowtext; border-right:1.0pt solid windowtext; padding:1.1pt; background-image:none; background-repeat:repeat; background-attachment:scroll' bgcolor="#CBDBD1">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>39%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background-position: 0% 0%; border-top:medium none; border-left:medium none; border-bottom:1.0pt solid windowtext; border-right:1.0pt solid windowtext; padding:1.1pt; background-image:none; background-repeat:repeat; background-attachment:scroll' bgcolor="#CBDBD1">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>22%&nbsp;</p>
		</td>
		<td valign=bottom style='background-position: 0% 0%; padding:1.1pt; background-image:none; background-repeat:repeat; background-attachment:scroll'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Research and Development Costs</b>.&nbsp; Research and development expenses
decreased $311,000 to $2,480,000 for the year ended June 30, 2010 from $2,791,000
for the year ended June 30, 2009, a decrease of 11%. &nbsp;The decrease was
primarily due to decreased labor and related costs.&nbsp; Research and development
costs were as follows:</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=660
 style='width:100%;border-collapse:collapse'>
	<tr style='page-break-inside:avoid;height:.05pt'>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.55pt'>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
		</td>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.6pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2010</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2009</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Decrease</p>
		</td>
	</tr>
	<tr style='height:12.55pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Research&nbsp;and&nbsp;Development&nbsp;(R&amp;D)&nbsp;Costs</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,480,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2,791,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(11%)</p>
		</td>
	</tr>
	<tr style='height:12.55pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Research&nbsp;and&nbsp;Development&nbsp;costs&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>11%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>13%&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>Operating Loss
and Operating Loss as a Percentage of Sales</b>.&nbsp; Our consolidated
operating loss for the year ended June 30, 2010 was $3,230,000 compared to an
operating loss of $1,492,000 for the year ended June 30, 2009.&nbsp; Operating loss as
a percentage of sales increased to 14% for the year ended June 30, 2010
compared to 7% for the year ended June 30, 2009.&nbsp; Operating loss and operating
loss as a percentage of sales were as follows:</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=631
 style='width:100%;border-collapse:collapse'>
	<tr style='page-break-inside:avoid;height:.05pt'>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<b>&nbsp;</b></p></td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
		</td>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.8pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2010</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2009</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(Decrease)</p>
		</td>
	</tr>
	<tr style='height:12.75pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Operating&nbsp;(Loss)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(3,230,000)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(1,492,000)</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>116%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.8pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Operating&nbsp;(Loss)&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(14%)</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(7%)</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Royalties and Other Income. </b>&nbsp;We earned and received $44,000 in
royalty payments in fiscal year 2010, compared to $14,000 in royalty payments
in 2009.&nbsp; The increase in 2010 was due to a single one-time royalty termination
payment of $40,000.&nbsp; We had no &#147;other&#148; expense during the years ended June 30,
2010 and 2009 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Net Interest Income/Expense. </b>&nbsp;Net interest expense was $202,000 in
the year ended June 30, 2010, which included $204,000 in interest expense
offset by $2,000 in interest income, compared to $226,000 in the year ended
June 30, 2009 which included $228,000 in interest expense offset by $2,000 in
interest income. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The decrease in interest expense is due to reductions in the outstanding
principal of our Carson City real estate loan and five year term note. &nbsp;We
continue to carry no balance on our revolving credit line note. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 26 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=575
 style='width:100%;border-collapse:collapse'>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
		</td>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Increase/</p>
		</td>
	</tr>
	<tr style='height:12.6pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2010</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>2009</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(Decrease)</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Debt&nbsp;related&nbsp;interest&nbsp;expense</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>204,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>228,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(11%)</p>
		</td>
	</tr>
	<tr style='height:12.6pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Interest&nbsp;income</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(2,000)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(2,000)</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>0%&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;interest&nbsp;expense</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>202,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>226,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>(11%)</p>
		</td>
	</tr>
	<tr style='height:12.6pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Interest&nbsp;expense&nbsp;as&nbsp;a&nbsp;Percentage&nbsp;of&nbsp;Sales</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1%&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1%&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><b>Income Tax Provision</b>.&nbsp; Our estimated effective combined federal
and state tax rate on loss from operations for the year ended June 30, 2010
resulted in a 12% benefit of loss before tax compared to a 67% provision of loss
before tax for the year ended June 30, 2009.&nbsp; The difference is due to the $2,241,000
valuation allowance against our current and long term deferred tax assets
established in 2009 which resulted in a net $1,141,000 income tax provision during
the fiscal year ended June 30, 2009.&nbsp; The valuation allowance was increased by
$710,000 in 2010, which partially offset the tax benefit from the loss before
tax for the year.&nbsp; The deferred tax valuation allowance is more fully described
in Note 5 of the accompanying Consolidated Financial Statements. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As
part of the process of preparing our consolidated financial statements, we are
required to estimate our income taxes in each of the jurisdictions in which we
operate. This process involves estimating our actual current tax liabilities
together with assessing temporary differences resulting from differing treatment
of items for tax and accounting purposes.&nbsp; These differences result in deferred
tax assets and liabilities, which are included within our consolidated balance
sheet.&nbsp; The deferred tax assets result primarily from tax basis of intangible
assets in excess of book basis. Each period we must assess the likelihood that
our deferred tax assets will be recovered from future taxable income and to the
extent management believes that recovery is not likely, we must establish a
valuation allowance. To the extent a valuation allowance is either increased or
decreased in a period, the impact will be included in the tax provision in the
statement of operations.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Significant management judgment is required in determining our provision
for income taxes and the recoverability of our deferred tax asset.&nbsp; Such
determination is based primarily on our historical taxable income, with some
consideration given to our estimates of future taxable income by jurisdictions
in which we operate and the period over which our deferred tax assets will be
recoverable.&nbsp; Due to cumulative losses during the past three years, we maintain
a $2,951,000 valuation allowance against our deferred tax assets as of June 30,
2010.&nbsp; Changes in the valuation allowance are recorded through income tax expense
and included in the tax provision in the statement of operations.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<b>Net
(Loss)&nbsp; </b>We had a net loss of $2,968,000 or $0.92 per share, basic, for the
year ended June 30, 2010, compared to a net loss of $2,845,000 or $0.88 per
share, basic, for the year ended June 30, 2009.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 27 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Liquidity and Capital
Resources </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:justify'>The following
table presents selected financial statistics and information for the periods
indicated: <br>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=534
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:medium none; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>As&nbsp;of</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>June&nbsp;30,&nbsp;2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>June&nbsp;30,&nbsp;2009</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Cash&nbsp;and&nbsp;cash&nbsp;equivalents</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,794,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,124,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			Working&nbsp;Capital<sup>1</sup></p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>6,369,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>4,548,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Credit&nbsp;Line&nbsp;outstanding&nbsp;balance</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Tangible&nbsp;book&nbsp;value/common&nbsp;share<sup>2</sup></p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2.36&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>2.27&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Number&nbsp;of&nbsp;days&nbsp;of&nbsp;sales&nbsp;outstanding&nbsp;(DSO)&nbsp;in</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			accounts&nbsp;receivable&nbsp;at&nbsp;end&nbsp;of&nbsp;quarter<sup>3</sup></p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>43&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>41&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Year&nbsp;ended</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>June&nbsp;30,&nbsp;2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>June&nbsp;30,&nbsp;2009</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Net&nbsp;cash&nbsp;provided&nbsp;by&nbsp;operations</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>3,240,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>1,718,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:6.0pt;text-align:center'>
<sup>&nbsp;</sup></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><sup>&nbsp;</sup></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><sup>1</sup> Working Capital = Ending Current Assets balance &#150; Ending
Current liabilities balance</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-autospace:
none'><sup>2</sup> Tangible book value/common share<sup> </sup>= {(Total
shareholders&#146; equity &#150; Net intangible asset (patents) &#150; Goodwill)}/(basic
outstanding shares)</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><sup>&nbsp;</sup></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><sup>3</sup> DSO = Ending Net Accounts Receivable balance/(Previous
Quarter Sales/91)</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>Our working capital at June 30,
2010 increased $1,821,000 (40%) to approximately $6.4 million compared to
approximately $4.5 million at June 30, 2009.&nbsp; The increased working capital is
due primarily to an increase in cash and equivalents of $2,670,000 offset by an
increase in current liabilities of $1,034,000 compared to June 30, 2009. &nbsp;Net
cash provided by operations during fiscal year 2010 was $3,240,000 as compared
to $1,718,000 during fiscal year 2009.&nbsp; Fiscal year 2010 cash provided by
operating activities was primarily the result of the net loss from operations
of $2,968,000 offset by non-cash items of $5,153,000 and changes in operating
assets and liabilities of $1,055,000.&nbsp; The non-cash items consisted primarily of
depreciation and amortization of $726,000, Carson City land and building
impairment of $1,307,000, Carson City goodwill impairment of $1,886,000 Micro Motors
goodwill impairment of $1,110,000 and the remaining IntraFlow patent impairment
of $140,000.&nbsp; Cash provided by changes in operating assets and liabilities was
primarily due to an increase in accounts payable of $451,000, an increase in
employee bonus accrual of $502,000 and an increase in warranty reserve of
$168,000.&nbsp; Included in the operating cash is a one-time benefit from a change
in the tax law that allowed us to recover $549,000 in previously unavailable
tax credits.&nbsp; &nbsp;&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Management believes that our working capital needs over the next twelve
months can be adequately supported by current operations.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>Potential
Reduction in Large Customer Orders</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In December, 2009 our largest customer informed us that is
was in the process of developing, and planned to eventually manufacture, its
own surgical hand pieces which are functionally comparable to the two products
currently provided to the customer by the Company.&nbsp; Pro-Dex has been the
exclusive manufacturer of these products since they were developed.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 28 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We currently provide the Customer with two products (&#147;Product
A&#148; and &#147;Product B&#148;) and repair services for such
products.&nbsp; Total revenue shipped in the last two fiscal years by each of these
categories is as follows:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=485
 style='width:75%;margin-left:4.65pt;border-collapse:collapse' id="table17">
		<tr style='height:17.25pt'>
			<td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Revenues during the 12
  months ended</p></td>
			<td valign=top style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Average % of Total</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td valign=top style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			<u>6/30/2010</u></p></td>
			<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
			<u>6/30/2009</u></p></td>
			<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Product A</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$4,398,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$2,851,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>46%</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Product B</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$3,965,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$2,717,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>42%</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Repairs</p>
			</td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$905,000
			</p></td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$962,000
			</p></td>
			<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>12%</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$9,268,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>$6,530,000
			</p></td>
			<td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>100%</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The customer has indicated that it has successfully
developed, tested, and released its version of Product A and is currently
shipping such product to new accounts.&nbsp; The customer has also indicated that it
intends to continue to purchase from Pro-Dex sufficient levels of Product A to
support replacement units for its existing customers in the U.S. and Europe
through at least the end of calendar year 2011 and will also use the Pro-Dex
Product A for all requirements in the South American market through approximately
the end of fiscal year 2012.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Regarding Product B, a more complex device, the customer
has indicated that the development and testing of that Product has been less
successful and that the Company can expect continued orders from the customer
for Product B through the end of calendar year 2011.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Lastly, the customer has indicated that it intends to
continue to use Pro-Dex&#146;s repair services for all Pro-Dex products for an
undetermined period, except in South America, where it will purchase components
from Pro-Dex to do its own repairs locally.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As a result of the foregoing, we expect that approximately
one-third of the revenue attributable to this customer during calendar year
2011 could move toward them.&nbsp; However, the customer is not obligated to abide
by the timetables it has currently expressed to us or to update us as to the
status of its product development efforts.&nbsp; Accordingly, we are unable to know
or predict the status of the customer's initiative on an ongoing basis.&nbsp; The
customer could accelerate, delay or terminate its transition to its own
products at any time and without notice to us, which could have a further
material impact on our revenues.&nbsp; The identity of the customer is protected by
a confidentiality agreement.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The Company intends to find additional business and reduce
its operating costs as necessary to minimize the impact of a potential revenue
reduction.&nbsp; In the event that the customer's future purchases are reduced
beyond the additional business won and the cost savings realized, the Company
is likely to experience a material and adverse impact on its business.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<i><u>Issues Related to Credit
Facilities</u></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>We have a credit facility with Wells
Fargo Bank, N.A. (&#147;Wells Fargo&#148;) and a mortgage with Union Bank of California, N.A (&#147;Union Bank&#148;).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<i><u>Wells Fargo Credit Facility</u></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As of June 30,
2010, the Wells Fargo credit facility had two components:&nbsp; </p>
<ul>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;margin-right:0in; margin-top:0in'>a revolving Credit Line Note (&#147;line of credit&#148;) of up to $1,000,000
in borrowing availability, and</p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;margin-right:0in; margin-top:0in'>a Five year Term Note (the &#147;TI Loan&#148;) with an initial balance of&nbsp;
$2,000,000, of which $1,366,667 was outstanding as of June 30, 2010. </p></li>
</ul>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;text-indent:
- -.25in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 29 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>If borrowings
under the line of credit exceed $500,000, the maximum amount of borrowing is limited
to the lesser of $1,000,000 or 70% of the eligible accounts receivable plus 40%
of the eligible inventory. &nbsp;Its terms require monthly interest payments at
either (i) the prime rate of interest (3.25% at June 30, 2010) plus 1.50%, or
(ii) three-month LIBOR (0.534% at June 30, 2010) plus 2.50%, at our discretion,
based on outstanding borrowings.&nbsp; The line of credit expires on November
1, 2010.&nbsp; We are charged an unused credit line fee of 1.5% per annum payable
quarterly on the average balance of the line of credit that is not used.
<font style="font-size: 10.0pt">&nbsp;</font>There was no outstanding balance under the
credit line as of June 30, 2010.&nbsp; The total eligible additional borrowing
capacity under the line of credit as of June 30, 2010 was $1,000,000.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The TI Loan had
an initial balance of $2,000,000.&nbsp; The borrowings from this term
commitment were used for construction of tenant improvements for our Irvine, California facility.&nbsp; Its terms require monthly principal and interest
payments over the 60-month life of the loan, based on outstanding
borrowings.&nbsp; The interest rate is fixed at 5.72% over the life of the
loan.&nbsp; There was a $1,366,667 outstanding balance under the TI Loan as of June
30, 2010.&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>All assets of
the Company except our Carson City land and building secure the outstanding
borrowings under the Wells Fargo credit facility.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><i><u>Union Bank Mortgage</u></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>In March 2006, we entered into a ten-year mortgage with Union Bank for
$1,650,000.&nbsp; The principal balance of the mortgage bears interest at a
fixed annual rate of 6.73%.&nbsp; Payments on the mortgage are $11,379 per
month (based on a 25 year amortization), with the balance of $1,291,666 in
principal due on April&nbsp;1, 2016.&nbsp; The mortgage is secured by our Carson City land and building.&nbsp; There was $1,528,000 in principal outstanding under
the mortgage as of June 30, 2010.&nbsp; &nbsp;On September 16, 2010, we paid the
remaining $1,519,000 balance due on the mortgage, fully retiring such
indebtedness.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>There are
certain financial and non-financial covenants that the Company must meet to be
in compliance with the terms of the Wells Fargo credit facility and mortgage
with Union Bank.&nbsp; As of the year ended June 30, 2010, we were in violation of
the Wells Fargo annual net income, the quarterly earnings before tax and fixed
charge coverage covenants.&nbsp; Wells Fargo waived these violations by a letter
agreement on September 17, 2010.&nbsp; We were in compliance with the Union Bank financial
covenant, however the Wells violation triggered a cross-default under the Union
Bank agreement as of June 30, 2010 that was waived on September 21, 2010. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>At June 30, 2010,
we had cash and cash equivalents of $3,794,000.&nbsp; We believe that our cash
and cash equivalents on hand, together with cash flows from operations, if any,
and amounts available under the credit facilities will be sufficient to meet
our working capital and capital expenditure requirements for this and the next
year.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In September
2002, our Board of Directors authorized the repurchase on the open market of up
to 166,667 shares of our outstanding Common Stock at a share price no greater
than $3.75, subject to compliance with applicable laws and regulations.&nbsp; There is
no requirement that we repurchase all or any portion of such shares.&nbsp; The
maximum total value of the repurchase is not to exceed $166,667.&nbsp; From the
inception of the repurchase authorization through the fiscal year-end date of
June 30, 2003, we repurchased 25,233 shares of Common Stock for $43,741, at an
average price of $1.74 per share.&nbsp; No additional shares were repurchased in
fiscal years 2004 through 2008.&nbsp; During fiscal year 2009, we repurchased 73,232
shares of common stock for $133,472, at an average price of $1.83 per share.
Since the initiation of the buyback program in 2002 through June 30, 2010, we
have repurchased 98,465 shares for $177,213 at an average price of $1.80 per
share. &nbsp;Our Board suspended the buyback authorization in May 2009 and has not
set a reinitiation date for the purchase of our shares pursuant to this
program.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 30 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>Impact of Inflation and Changing Prices </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
industries in which we compete are labor intensive, often involving personnel
with high-level technical or sales skills. Wages and other expenses increase
during periods of inflation and when shortages in the marketplace occur. In
addition, suppliers pass along rising costs to us in the form of higher prices.
To some extent, we have been able to offset increases in operating costs by
increasing charges, expanding services and implementing cost control measures.
Nevertheless, our ability to increase prices is limited by market conditions,
including international competition in many of our markets.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Recent Accounting Pronouncements</b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;line-height:
normal'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:9.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;
margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>In August 2009, the FASB issued ASU
No.&nbsp;2009-05, &#147;Measuring Liabilities at Fair Value,&#148; (ASU 2009-05) which
provides clarification that in circumstances where a quoted market price in an
active market for an identical liability is not available, a reporting entity
must measure fair value of the liability using one of the following techniques:
1)&nbsp;the quoted prices for similar liabilities or similar liabilities when
traded as assets; or 2)&nbsp;another valuation technique, such as a present value
technique or the amount that the reporting entity would pay to transfer the
identical liability or would receive to enter into the identical liability that
is consistent with the provisions of ASC 820, &#147;Fair Value Measurements and
Disclosures.&#148; The Company adopted this statement for the quarter ended
September&nbsp;30, 2009. The adoption of ASU 2009-05 did not have a material
impact on our financial position or results of operations. </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin-top:4.5pt;margin-right:0in;margin-bottom:0in;margin-left:0in;
margin-bottom:.0001pt;text-indent:24.5pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:4.5pt;margin-right:0in;margin-bottom:0in;margin-left:0in;
margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>In January 2010, the FASB issued
authoritative guidance intended to improve disclosure about fair value
measurements. The guidance requires entities to disclose significant transfers
in and out of fair value hierarchy levels and the reasons for the transfers and
to present information about purchases, sales, issuances, and settlements separately
in the reconciliation of fair value measurements using significant unobservable
inputs (Level&nbsp;3). Additionally, the guidance clarifies that a reporting
entity should provide fair value measurements for each class of assets and
liabilities and disclose the inputs and valuation techniques used for fair
value measurements using significant other observable inputs
(Level&nbsp;2)&nbsp;and significant unobservable inputs (Level&nbsp;3). This
guidance is effective for interim and annual periods beginning after
December&nbsp;15, 2009 except for the disclosure about purchases, sales,
issuances and settlements in the Level&nbsp;3 reconciliation, which will be
effective for interim and annual periods beginning after December&nbsp;15,
2010. As this guidance provides only disclosure requirements, the adoption of
this standard will not impact the Company&#146;s consolidated financial statements.
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The FASB has
issued Accounting Standards Codification (ASC) and
the Hierarchy of Generally Accepted Accounting Principles (Codification). This
authoritative guidance established the Codification, which officially launched
on July&nbsp;1, 2009, to serve as the source of authoritative GAAP recognized
by the FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the Securities and Exchange Commission (SEC) under authority of
federal securities laws are also sources of authoritative GAAP for SEC
registrants. The subsequent issuances of new standards will be in the form of
Accounting Standards Updates (ASUs) that will be included in the Codification.
The Company adopted the Codification for the quarter ended September&nbsp;30,
2009. The Company&#146;s adoption of the Codification did not have any impact on the
Company&#146;s financial position and operations as this change is disclosure-only
in nature. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b>
<a name="Item_7A.__Quantitative_and_Qualitative_Disclosures_About_Market_Risks__">Item 7A.&nbsp; Quantitative
and Qualitative Disclosures About Market Risks&nbsp; </a></b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Not
applicable.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 31 -</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<p style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>
<b><a name="Item_8.___Financial_Statements_and_Supplementary_Data">Item 8.&nbsp;&nbsp;
Financial Statements and Supplementary Data</a></b></p>
<p style='margin-top:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:0in;line-height:200%;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;line-height:normal'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The financial statements and supplemental data of the Company may be found in
this report on the pages indicated below.</p>
<div align=center>
	<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
		<tr>
			<td width=492 valign=top style='width:369.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<u>
			<a href="#Report_of_Independent_Registered_Public_Accounting_Firm_">Report of Independent Registered Public Company
  Accounting Firm</a>&nbsp; </u></p></td>
			<td width=42 valign=top style='width:31.5pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>34</p>
			</td>
		</tr>
		<tr>
			<td width=492 valign=top style='width:369.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<a href="#CONSOLIDATED&nbsp;BALANCE&nbsp;SHEETS_">Consolidated
  Balance Sheet </a></p></td>
			<td width=42 valign=top style='width:31.5pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>35
  			</p></td>
		</tr>
		<tr>
			<td width=492 valign=top style='width:369.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<u><a href="#CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;OPERATIONS_">Consolidated Statements of
  Operations</a></u></p></td>
			<td width=42 valign=top style='width:31.5pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>36<font style="font-size: 10.0pt">
			</font></p></td>
		</tr>
		<tr>
			<td width=492 valign=top style='width:369.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<a href="#CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;SHAREHOLDERS&nbsp;EQUITY_">Consolidated Statements of Shareholders' Equity
			</a></p></td>
			<td width=42 valign=top style='width:31.5pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>37</p>
			</td>
		</tr>
		<tr>
			<td width=492 valign=top style='width:369.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<a href="#CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;CASH&nbsp;FLOWS_">Consolidated Statements of Cash Flows
			</a></p></td>
			<td width=42 valign=top style='width:31.5pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>38
  			</p></td>
		</tr>
		<tr>
			<td width=492 valign=top style='width:369.0pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
			<a href="#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMENTS__">Notes to Consolidated Financial Statements
			</a></p></td>
			<td width=42 valign=top style='width:31.5pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>39</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>
<a name="Item_9.___Changes_in_and_Disagreements_with_Accountants_on_Accounting_and_Financial_Disclosure">Item 9.&nbsp;&nbsp; Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure</a></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>None.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><a name="Item_9A.___Controls_and_Procedures">Item 9A.&nbsp;&nbsp; Controls
and Procedures</a></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp; The Chief
Executive Officer and Chief Financial Officer (the principal executive officer
and principal financial officer, respectively) conducted an evaluation of the
design and operation of our &#147;disclosure controls and procedures&#148; (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (&#147;Exchange Act&#148;)).&nbsp; Based on that evaluation for the quarter ended June
30, 2010, the Chief Executive Officer and the Chief Financial Officer concluded
that the disclosure controls and procedures are effective.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
Our
management is responsible for establishing and maintaining adequate &#147;internal
control over financial reporting&#148;
(as defined in Rule 13a-15(f) under the Exchange Act).
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we conducted
an evaluation of the effectiveness of our internal control over financial
reporting based on the framework set forth in <i>Internal Control &#151; Integrated
Framework </i>issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, our management concluded that
our internal control over financial reporting was effective as of June 30, 2010.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
Our
internal control over financial reporting is supported by written policies and
procedures, that:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of our assets; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of our company are
being made only in accordance with authorizations of our management and
directors; and </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect
on the financial statements. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risks that controls may
become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
			<a name="_DV_C22"></a>- 32 -</p></td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>This annual
report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.&nbsp;
Management&#146;s report was not subject to attestation by our registered public
accounting firm pursuant to rules of the SEC that apply to small,
non-accelerated filers that permit us to provide only management&#146;s attestation
in this annual report.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>During the
quarter ended June 30, 2010, there were no changes in the Company's internal
controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)
under the Exchange Act) that have materially affected, or are reasonably likely
to materially affect, the Company's internal controls over financial reporting.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<a
name="Other_Information_page26"></a><b>Item 9B.&nbsp;&nbsp; Other Information.
</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>None.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>PART
III</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Item 10.&nbsp;&nbsp;
Directors, Executive Officers, and Corporate Governance</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Information required by this Item is incorporated by reference from the
information contained in the Company's definitive Proxy Statement for the
Company's 2010 Annual Meeting of Shareholders to be filed with the SEC within
120 days after the end of the fiscal year ended June 30, 2010 (the &quot;Proxy
Statement&quot;). </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Item 11.&nbsp;&nbsp;
Executive Compensation </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Information
required by this Item is incorporated by reference from the Proxy Statement. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Item 12.&nbsp;&nbsp; Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Information required by this Item is
incorporated by reference from the Proxy Statement. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<a
name="Page27_Relationships_Fees_Exh"></a><b>Item 13.&nbsp;&nbsp; Certain
Relationships and Related Transactions, and Director Independence </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Information required by this Item is
incorporated by reference from the Proxy Statement. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Item 14.&nbsp;&nbsp;
Principal Accountant Fees and Services </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>Information required by this Item
is incorporated by reference from the Proxy Statement. </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>
<font style="font-size: 7.5pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>PART
IV</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><a name="Item_15.___Exhibits_">Item 15.&nbsp;&nbsp; Exhibits
</a></b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; See Exhibit Index.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 33 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b><a name="Report_of_Independent_Registered_Public_Accounting_Firm_">Report of
Independent Registered Public Accounting Firm</a></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>The Stockholders and Board of
Directors</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>Pro-Dex, Inc.: </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>We
have audited the accompanying consolidated balance sheets of Pro-Dex, Inc. and
Subsidiaries (the Company) as of June 30, 2010 and 2009 and the related
consolidated statements of operations, shareholders&#146; equity and cash flows for
each of the years in the two-year period ended June 30, 2010.&nbsp; These
consolidated financial statements are the responsibility of the Company&#146;s
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.&nbsp; Our audits included
consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Pro-Dex, Inc. and
Subsidiaries as of June 30, 2010 and 2009, and the results of their operations
and their cash flows for each of the two years in the two-year period ended June
30, 2010 in conformity with accounting principles generally accepted in the United
States of America. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:24.5pt'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Irvine, California
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
September 28, 2010
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 34 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=583
 style='width:100%;border-collapse:collapse'>
	<tr style='height:15.2pt'>
		<td colspan=5 valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b>PRO-DEX,&nbsp;INC.&nbsp;and&nbsp;SUBSIDIARIES</b></p></td>
	</tr>
	<tr style='height:15.15pt'>
		<td colspan=5 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><a name="CONSOLIDATED&nbsp;BALANCE&nbsp;SHEETS_">CONSOLIDATED&nbsp;BALANCE&nbsp;SHEETS</a></b></p>
		</td>
	</tr>
	<tr style='height:9.4pt'>
		<td valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:15.15pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<i><font size="2">30-Jun-10</font></i></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<i><font size="2">30-Jun-09</font></i></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">ASSETS</font></b></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Current&nbsp;assets:</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash&nbsp;and&nbsp;cash&nbsp;equivalents</font></p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,794,000&nbsp;</font></p></td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,124,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:13.75pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts&nbsp;receivable,&nbsp;net&nbsp;of&nbsp;allowance&nbsp;for&nbsp;doubtful&nbsp;accounts</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of&nbsp;$25,000&nbsp;in&nbsp;2010&nbsp;and&nbsp;$52,000&nbsp;in&nbsp;2009</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,682,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,515,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other&nbsp;Current&nbsp;Receivables</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">22,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,228,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,365,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid&nbsp;expenses</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">174,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">117,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid&nbsp;income&nbsp;taxes</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">118,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred&nbsp;income&nbsp;taxes</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">209,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;current&nbsp;assets</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">10,109,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">7,255,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:6.5pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Property,&nbsp;plant,&nbsp;equipment&nbsp;and&nbsp;leasehold&nbsp;improvements,&nbsp;net</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">4,092,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">5,981,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Other&nbsp;assets:</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,997,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangibles&nbsp;-&nbsp;Patents,&nbsp;net</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">147,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">78,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">87,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;other&nbsp;assets</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">78,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,231,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:5.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Total&nbsp;assets</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">14,279,000&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,467,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:2.9pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">LIABILITIES&nbsp;AND&nbsp;SHAREHOLDERS'&nbsp;EQUITY</font></b></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Current&nbsp;liabilities:</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts&nbsp;payable</font></p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,279,000&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">827,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued&nbsp;expenses</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,947,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,394,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income&nbsp;taxes&nbsp;payable</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">79,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">53,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current&nbsp;Portion&nbsp;of&nbsp;T.I.&nbsp;Loan</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">400,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">400,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current&nbsp;portion&nbsp;of&nbsp;real&nbsp;estate&nbsp;loan</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">35,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">33,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;current&nbsp;liabilities</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,740,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,707,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:6.5pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:10.85pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Long-term&nbsp;liabilities:</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Notes&nbsp;Payable&nbsp;-&nbsp;T.I.&nbsp;Loan</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">967,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,367,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Real&nbsp;estate&nbsp;loan</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,493,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,528,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Deferred&nbsp;income&nbsp;taxes</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">209,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">171,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Deferred&nbsp;rent</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">255,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">212,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;long-term&nbsp;liabilities</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,924,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,278,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:6.5pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Total&nbsp;liabilities</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">6,664,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">5,985,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Commitments&nbsp;and&nbsp;contingencies</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Shareholders'&nbsp;equity:</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common&nbsp;shares;&nbsp;no&nbsp;par&nbsp;value;&nbsp;50,000,000&nbsp;shares&nbsp;authorized;</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,251,850&nbsp;shares&nbsp;issued&nbsp;and&nbsp;outstanding&nbsp;June&nbsp;30,&nbsp;2010</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,222,890&nbsp;shares&nbsp;issued&nbsp;and&nbsp;outstanding&nbsp;June&nbsp;30,&nbsp;2009</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,675,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,574,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated&nbsp;deficit</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(9,060,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(6,092,000)</font></p></td>
	</tr>
	<tr style='height:9.4pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;shareholders'&nbsp;equity</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">7,615,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">10,482,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:6.5pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.3pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;liabilities&nbsp;and&nbsp;shareholders'&nbsp;equity</font></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:3px double windowtext; background:#CBDBD1; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:3px double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">14,279,000&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:3px double windowtext; background:#CBDBD1; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:3px double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,467,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:13.0pt'>
		<td colspan=5 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<i><font size="2">See&nbsp;notes&nbsp;to&nbsp;consolidated&nbsp;financial&nbsp;statements.</font></i></p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<b>&nbsp;</b></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 35 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br
clear=all style='page-break-before:always'></font>
<table class=MsoNormalTable border=0 cellpadding=0 width=608
 style='width:100%;border-collapse:collapse'>
	<tr style='height:14.95pt'>
		<td colspan=5 valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b>PRO-DEX,&nbsp;INC.&nbsp;and&nbsp;SUBSIDIARIES</b></p></td>
	</tr>
	<tr style='height:14.95pt'>
		<td colspan=5 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><a name="CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;OPERATIONS_">CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;OPERATIONS</a></b></p>
		</td>
	</tr>
	<tr style='height:14.95pt'>
		<td colspan=5 valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b>Years&nbsp;ended&nbsp;June&nbsp;30</b></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<i><font size="2">2010</font></i></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<i><font size="2">2009</font></i></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;sales</font></p></td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">23,211,000&nbsp;</font></p></td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">21,122,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.15pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cost&nbsp;of&nbsp;sales</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">14,847,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">14,374,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Gross&nbsp;profit</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">8,364,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">6,748,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Operating&nbsp;expenses:</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling&nbsp;expense</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,382,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,295,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General&nbsp;and&nbsp;administrative&nbsp;expenses</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,288,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,157,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment&nbsp;of&nbsp;intangible&nbsp;assets</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,137,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">997,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment&nbsp;of&nbsp;property&nbsp;value</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,307,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research&nbsp;and&nbsp;development&nbsp;costs</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,480,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,791,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Total&nbsp;operating&nbsp;expenses</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">11,594,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">8,240,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(Loss)&nbsp;from&nbsp;operations</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(3,230,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(1,492,000)</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.15pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Other:</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalty&nbsp;income</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">44,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">14,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest&nbsp;income</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest&nbsp;(expense)</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(204,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(228,000)</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Total</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(158,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(212,000)</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(Loss)&nbsp;Income&nbsp;before&nbsp;provision&nbsp;for&nbsp;income&nbsp;taxes</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(3,388,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(1,704,000)</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Benefit&nbsp;for&nbsp;Income&nbsp;Taxes</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,130,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,100,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Allowance&nbsp;for&nbsp;deferred&nbsp;tax&nbsp;asset</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(710,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,241,000)</font></p></td>
	</tr>
	<tr style='height:12.85pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Total&nbsp;Benefit&nbsp;(Provision)&nbsp;for&nbsp;Income&nbsp;taxes</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">420,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(1,141,000)</font></p></td>
	</tr>
	<tr style='height:12.8pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;(Loss)</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,968,000)</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,845,000)</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;(Loss)&nbsp;per&nbsp;share:</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(0.92)</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(0.88)</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(0.92)</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(0.88)</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Weighted&nbsp;average&nbsp;shares&nbsp;outstanding&nbsp;-&nbsp;basic</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,232,850&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,236,918&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.1pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Weighted&nbsp;average&nbsp;shares&nbsp;outstanding&nbsp;-&nbsp;diluted</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,232,850&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,236,918&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.15pt'>
		<td valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i><font style="font-size: 9.0pt">&nbsp;</font></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i><font style="font-size: 9.0pt">See notes to consolidated financial statements.</font></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 36 -</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<p style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br
clear=all style='page-break-before:always'></font>
<table class=MsoNormalTable border=0 cellpadding=0 width=625
 style='width:100%;border-collapse:collapse'>
	<tr style='height:14.15pt'>
		<td colspan=11 valign=bottom style='border-top:medium none;
  border-left:medium none windowtext;border-bottom:medium none;border-right:medium none windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<b>
		<a name="CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;SHAREHOLDERS&nbsp;EQUITY_">CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;SHAREHOLDERS'&nbsp;EQUITY</a></b></p>
		</td>
	</tr>
	<tr style='height:14.2pt'>
		<td colspan=11 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<b>Years&nbsp;ended&nbsp;June&nbsp;30</b></p></td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#FFFFFF;padding:
  1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#FFFFFF;padding:
  1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#FFFFFF;padding:
  1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.15pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=4 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Common&nbsp;Shares</font></p></td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Number</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Accumulated</font></p></td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">of&nbsp;Shares</font></p></td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Amount</font></p></td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Deficit</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Total</font></p></td>
	</tr>
	<tr style='height:12.2pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.15pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Balance&nbsp;2007</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,239,455&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,340,000&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(3,489,000)</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">12,851,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.15pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:34.4pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cumulative&nbsp;retained&nbsp;earnings&nbsp;adjustment</font></p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">for&nbsp;prior&nbsp;years&nbsp;due&nbsp;to&nbsp;accounting</font></p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">standards&nbsp;change&nbsp;(FIN&nbsp;48)</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(75,000)</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(75,000)</font></p></td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:22.95pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Issuance&nbsp;of&nbsp;restricted&nbsp;shares&nbsp;and&nbsp;Stock-</font></p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Based&nbsp;compensation</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">28,333&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">205,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">205,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;Income</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">317,000&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">317,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Balance&nbsp;2008</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,267,789&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,545,000&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(3,247,000)</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">13,298,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Repurchase&nbsp;of&nbsp;Common&nbsp;Stock</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(73,232)</font></p></td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(137,000)</font></p></td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(137,000)</font></p></td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:22.95pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Issuance&nbsp;of&nbsp;restricted&nbsp;shares&nbsp;and&nbsp;Stock-</font></p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Based&nbsp;compensation</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">28,333&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">166,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">166,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;(Loss)</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,845,000)</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,845,000)</font></p></td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Balance&nbsp;2009</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,222,890&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,574,000&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(6,092,000)</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">10,482,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:22.95pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Issuance&nbsp;of&nbsp;restricted&nbsp;shares&nbsp;and&nbsp;Stock-</font></p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Based&nbsp;compensation</font></p></td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">28,334&nbsp;</font></p></td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">101,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">101,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:22.95pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Additional&nbsp;shares&nbsp;due&nbsp;to&nbsp;reverse&nbsp;stock</font></p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">split&nbsp;rounding</font></p></td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">626&nbsp;</font></p></td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;(Loss)</font></p></td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,968,000)</font></p></td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,968,000)</font></p></td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Balance&nbsp;2010</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,251,850&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,675,000&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(9,060,000)</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">7,615,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i><font style="font-size: 9.0pt">See notes to consolidated financial statements.</font></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 37 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
<i><font style="font-size: 9.0pt">&nbsp;</font></i></p>
<table class=MsoNormalTable border=0 cellpadding=0 width=689
 style='width:100%;border-collapse:collapse'>
	<tr style='height:12.0pt'>
		<td colspan=5 valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<b>PRO-DEX,&nbsp;INC.&nbsp;and&nbsp;SUBSIDIARIES</b></p></td>
	</tr>
	<tr style='height:12.05pt'>
		<td colspan=5 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<b><a name="CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;CASH&nbsp;FLOWS_">CONSOLIDATED&nbsp;STATEMENTS&nbsp;OF&nbsp;CASH&nbsp;FLOWS</a></b></p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td colspan=5 valign=bottom style='background:#FFFFFF;
  padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<b>Years&nbsp;ended&nbsp;June&nbsp;30</b></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<i><font size="2">2010</font></i></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<i><font size="2">2009</font></i></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cash&nbsp;Flows&nbsp;from&nbsp;Operating&nbsp;Activities:</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;Income</font></p></td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,968,000)</font></p></td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,845,000)</font></p></td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments&nbsp;to&nbsp;reconcile&nbsp;net&nbsp;income&nbsp;to&nbsp;net&nbsp;cash&nbsp;used&nbsp;in&nbsp;operating&nbsp;activities:</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation&nbsp;and&nbsp;amortization</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">726,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">810,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment&nbsp;of&nbsp;intangible&nbsp;asset&nbsp;and&nbsp;property&nbsp;value</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">4,444,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">997,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss&nbsp;on&nbsp;disposal</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">25,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Recovery&nbsp;of)&nbsp;doubtful&nbsp;accounts</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(27,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(92,000)</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock&nbsp;based&nbsp;compensation</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">101,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">166,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred&nbsp;taxes</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(91,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,058,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes&nbsp;in:</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase)&nbsp;Decrease&nbsp;in&nbsp;accounts&nbsp;receivable</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(146,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">609,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease&nbsp;in&nbsp;inventories</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">137,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,737,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase)&nbsp;Decrease&nbsp;in&nbsp;prepaid&nbsp;expenses</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(57,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">97,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease&nbsp;(Increase)&nbsp;in&nbsp;other&nbsp;assets</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">9,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(20,000)</font></p></td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase&nbsp;(Decrease)&nbsp;in&nbsp;accounts&nbsp;payable&nbsp;and&nbsp;accrued&nbsp;expenses</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,086,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(1,505,000)</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase&nbsp;in&nbsp;income&nbsp;taxes&nbsp;payable</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">26,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">681,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;Cash&nbsp;provided&nbsp;by&nbsp;Operating&nbsp;Activities</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,240,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,718,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:4.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cash&nbsp;Flows&nbsp;From&nbsp;Investing&nbsp;Activities:</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase&nbsp;of&nbsp;equipment&nbsp;and&nbsp;leasehold&nbsp;improvements</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(137,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(269,000)</font></p></td>
	</tr>
	<tr style='height:4.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;Cash&nbsp;used&nbsp;in&nbsp;Investing&nbsp;Activities</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(137,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(269,000)</font></p></td>
	</tr>
	<tr style='height:4.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cash&nbsp;Flows&nbsp;from&nbsp;Financing&nbsp;Activities:</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Principal)&nbsp;payments&nbsp;of&nbsp;patent&nbsp;deferred&nbsp;payable</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(45,000)</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net&nbsp;(payments)&nbsp;on&nbsp;Line&nbsp;of&nbsp;Credit</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(2,000,000)</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal&nbsp;(payments)&nbsp;on&nbsp;Term&nbsp;Note</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(400,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(396,000)</font></p></td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;Net&nbsp;Principal&nbsp;borrowing&nbsp;on&nbsp;TI&nbsp;Loan</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,767,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal&nbsp;payments&nbsp;on&nbsp;Real&nbsp;Estate&nbsp;Loan</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(33,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(31,000)</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock&nbsp;Repurchases</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(137,000)</font></p></td>
	</tr>
	<tr style='height:4.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;Cash&nbsp;(used&nbsp;in)&nbsp;Financing&nbsp;Activities</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(433,000)</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">(842,000)</font></p></td>
	</tr>
	<tr style='height:4.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Net&nbsp;increase&nbsp;&nbsp;in&nbsp;Cash&nbsp;and&nbsp;Cash&nbsp;Equivalents</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,670,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">607,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cash&nbsp;and&nbsp;Cash&nbsp;Equivalents,&nbsp;beginning&nbsp;of&nbsp;year</font></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,124,000&nbsp;</font></p></td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">517,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:4.25pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cash&nbsp;and&nbsp;Cash&nbsp;Equivalents,&nbsp;end&nbsp;of&nbsp;year</font></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">3,794,000&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">1,124,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:4.25pt'>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.0pt'>
		<td colspan=5 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<i><font size="2">Supplemental&nbsp;Information</font></i></p></td>
	</tr>
	<tr style='height:12.05pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cash&nbsp;paid&nbsp;for&nbsp;interest</font></p></td>
		<td valign=bottom style='border:medium none;background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">204,000&nbsp;</font></p></td>
		<td valign=bottom style='border:medium none;background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">230,000&nbsp;</font></p></td>
	</tr>
	<tr style='height:12.0pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Cash&nbsp;paid&nbsp;for&nbsp;income&nbsp;taxes</font></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">154,000&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
	</tr>
	<tr style='height:4.25pt'>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<i><font style="font-size: 9.0pt">See notes to consolidated financial statements.</font></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 38 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br
clear=all style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>PRO-DEX,
INC. AND SUBSIDIARIES </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><a name="NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMENTS__">NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS </a></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>June
30, 2010 and 2009</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 1 &#150; DESCRIPTION OF
BUSINESS </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 7.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Pro-Dex, Inc. specializes in bringing speed to
market in the development and manufacture of technology-based solutions that
incorporate miniature rotary drive systems, embedded motion control and
fractional horsepower DC motors, serving the medical, dental, semi-conductor,
scientific research and aerospace markets. Pro-Dex's products are found in
hospitals, dental offices, medical engineering labs, commercial and military
aircraft, scientific research facilities and high tech manufacturing operations
around the world.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Principles of Consolidation </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 7.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The consolidated
financial statements include the accounts of the Company and its wholly owned
subsidiaries, Pro-Dex Astromec, Inc. and Pro-Dex Management, Inc.&nbsp; Pro-Dex
Management, Inc. is a non-operating subsidiary.&nbsp; All significant inter-company
accounts and transactions have been eliminated.&nbsp;&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Basis of Presentation</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The accompanying consolidated financial statements have been prepared in
accordance with accounting principals generally accepted in the United States of America.
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Revenue Recognition </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 7.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>Revenue on virtually all product
sales is recognized upon shipment to the customer based on its terms of FOB
shipping point, where the risk of loss and title transfer to the customer.&nbsp; We
record sales in accordance with ASC 605 (Formerly SEC Staff Accounting Bulletin
No. 104, <i>Revenue Recognition</i>.)&nbsp; Under these guidelines, revenue is
recognized when all of the following exist: persuasive evidence that a sale
arrangement exists, delivery of the product has occurred, the price is fixed or
determinable, and payment is reasonably assured.&nbsp; We sell some of our products
with a warranty that provides for repairs or replacement of any defective parts
for a period after the sale. At the time of the sale, the Company accrues an
estimate of the cost of providing the warranty based on prior experience, but
does not accrue an allowance for sales returns.&nbsp; The Company recognizes revenue
under research and development agreements as certain deliverables are met as
specified in each development contract. </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Cash and Cash Equivalents </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 7.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>The Company considers all highly
liquid investments with an original maturity of ninety days or less to be cash
equivalents.</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Accounts Receivable </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 7.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Trade receivables are carried at original invoice amount less an estimate
made for doubtful accounts based on a monthly review of all outstanding
amounts.&nbsp; Management determines the allowance for doubtful accounts by
identifying troubled accounts and using historical experience applied to an
aging of accounts.&nbsp; Trade receivables are written off when deemed
uncollectible.&nbsp; Recoveries of trade receivables previously written off are
offset against the allowance when received. Changes in reserve for allowance
for doubtful accounts are as follows for the years ended June 30, 2010 and 2009:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 39 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br
clear=all style='page-break-before:always'></font>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=513
 style='width:75%;border-collapse:collapse'>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;Ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Balance&nbsp;at&nbsp;the&nbsp;beginning&nbsp;of&nbsp;the&nbsp;year</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>52,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>144,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Write&nbsp;off&nbsp;of&nbsp;doubtful&nbsp;accounts</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(15,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(39,000)</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Collection&nbsp;of&nbsp;doubtful&nbsp;accounts</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(12,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(53,000)</p>
			</td>
		</tr>
		<tr style='height:12.95pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Balance&nbsp;at&nbsp;the&nbsp;end&nbsp;of&nbsp;the&nbsp;year</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>25,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>52,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Inventories</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Inventories are stated at the lower of cost (the first-in, first-out method) or
market and consist of the following at June 30, 2010 and 2009:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=529
 style='width:75%;border-collapse:collapse'>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;Ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.95pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Raw&nbsp;Materials</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,311,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,290,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Work&nbsp;in&nbsp;process</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>607,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>866,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:15.3pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Finished&nbsp;goods</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,310,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,209,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.95pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;inventories</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3,228,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3,365,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Warranties</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The warranty accrual is based on historical costs of warranty repairs and
expected future identifiable warranty expenses.&nbsp; Warranty expenses are
reflected in the financial statements in Cost of Sales (&#147;COS&#148;).&nbsp; The warranty
accrual and expenses for the years ended June 30, 2010 and 2009 are presented
below:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=593
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.45pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;Ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:12.5pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.45pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Beginning&nbsp;Balance</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>518,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>861,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.5pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;Warranties&nbsp;issued&nbsp;during&nbsp;period</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>777,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>664,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.45pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Adjustments&nbsp;to&nbsp;pre-existing&nbsp;warranties</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.5pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;due&nbsp;to&nbsp;assumption&nbsp;changes</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(58,000)</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(406,000)</p>
			</td>
		</tr>
		<tr style='height:12.45pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Settlements&nbsp;(actual&nbsp;expenditures)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(551,000)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(601,000)</p>
			</td>
		</tr>
		<tr style='height:12.5pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Ending&nbsp;Balance</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>686,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>518,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Accrued warranty expense increased during fiscal year ending June 30,
2010 compared to fiscal year ending June 30, 2009 due to more units shipped that
were eligible for warranty coverage.&nbsp; The repair costs and expected product return
assumptions are reviewed quarterly.&nbsp; The table below reflects the effects on
the fiscal year ending June 30, 2010 and 2009 net loss and net loss per share
for the assumption changes.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=711
 style='width:75%;border-collapse:collapse' id="table8">
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.55pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;Ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:11.5pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:11.55pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Loss&nbsp;before&nbsp;provision&nbsp;for&nbsp;income&nbsp;taxes&nbsp;-&nbsp;before&nbsp;estimate&nbsp;change</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(3,033,000)</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(2,979,000)</p>
			</td>
		</tr>
		<tr style='height:11.55pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;Add:&nbsp;&nbsp;Impact&nbsp;of&nbsp;change&nbsp;in&nbsp;warranty&nbsp;reserve&nbsp;estimate&nbsp;assumptions</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>58,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>406,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.55pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;Less&nbsp;:&nbsp;Tax&nbsp;effect</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>7,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(272,000)</p>
			</td>
		</tr>
		<tr style='height:11.5pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Net&nbsp;Loss&nbsp;after&nbsp;provision&nbsp;of&nbsp;income&nbsp;taxes&nbsp;-&nbsp;after&nbsp;estimate&nbsp;change</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(2,968,000)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(2,845,000)</p>
			</td>
		</tr>
		<tr style='height:11.55pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.55pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>EPS&nbsp;-&nbsp;before&nbsp;provision&nbsp;for&nbsp;income&nbsp;taxes&nbsp;-&nbsp;before&nbsp;estimate&nbsp;change</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(0.94)</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(0.93)</p>
			</td>
		</tr>
		<tr style='height:11.5pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;Add:&nbsp;&nbsp;Impact&nbsp;of&nbsp;change&nbsp;in&nbsp;warranty&nbsp;reserve&nbsp;estimate&nbsp;assumptions</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0.02&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0.13&nbsp;</p>
			</td>
		</tr>
		<tr style='height:11.55pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;Less&nbsp;:&nbsp;Tax&nbsp;effect</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(0.08)</p>
			</td>
		</tr>
		<tr style='height:11.55pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>EPS&nbsp;-&nbsp;after&nbsp;provision&nbsp;of&nbsp;income&nbsp;taxes&nbsp;-&nbsp;after&nbsp;estimate&nbsp;change</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(0.92)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(0.88)</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 40 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Property, Plant, Equipment
&amp; Leasehold Improvements, Net</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>Property, plant, equipment and leasehold
improvements<b> </b>is recorded at cost and owned land and buildings are
recorded at the value of their highest and best use and consist of the
following as of June 30, 2010 and 2009: </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=495
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:medium none; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;Ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Land</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>278,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>757,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Building</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>641,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,470,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Leasehold&nbsp;Improvements</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>2,287,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>2,287,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Equipment</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>6,746,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>6,616,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Total</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>9,952,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>11,130,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Accumulated&nbsp;Depreciation</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(5,860,000)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(5,149,000)</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Total&nbsp;property,&nbsp;plant&nbsp;&amp;&nbsp;equipment,&nbsp;net</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:3px double windowtext; background:#CBDBD1; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:3px double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4,092,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:3px double windowtext; background:#CBDBD1; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:3px double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>5,981,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>Depreciation is
provided using the straight-line method over the estimated useful lives of the
assets as follows: Building - 39 years, equipment - 3 to10 years; and leasehold
improvements are depreciated over the shorter of the term of the lease or their
estimated useful lives.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We determined a triggering event occurred with
the Carson City land and building (&#147;the property&#148;) due to the expected
undiscounted cash flows being below the carrying value of the property, indicating
impairment.&nbsp; The land was reduced to $370,000 from $757,000 and the
building was reduced to $801,000 from $1,470,000.&nbsp; (See Note 10 of the
consolidated financial statements.)</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<b>Goodwill and
Intangible Assets</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In accordance with ASC 350 (formerly SFAS No. 142,
&#147;Intangible&#151;Goodwill and Other,&#148;) intangible assets
with definite lives are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Impairment indicators include, among other conditions, cash flow
deficits, historic or anticipated declines in revenue or operating profit and
adverse legal or regulatory developments. We assess potential impairment
of our goodwill and intangible assets when there is evidence that recent events
or changes in circumstances have made recovery of an asset&#146;s carrying value
unlikely. &nbsp;We also assess potential impairment of our goodwill and intangible
assets on an annual basis during our fourth quarter, regardless if there is
evidence or suspicion of impairment.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>If it is determined that such indicators are present and
the review indicates that the assets will not be fully recoverable, based on
undiscounted estimated cash flow over the remaining amortization periods, the
carrying values are reduced to estimated fair market value. In
accordance with ASC 350, a two-step impairment test is required to identify
potential goodwill impairment and measure the amount of the goodwill impairment
loss to be recognized. In the first step, the fair value of each reporting unit
is compared to its carrying amount, including goodwill. If the carrying amount
of the reporting unit exceeds its fair value, the second step of the goodwill
impairment test is performed to measure the amount of impairment loss, if any.
If the fair value of the reporting unit exceeds the carrying amount of the net
assets assigned to that unit, then goodwill is not impaired and no further
testing is required.&nbsp; (See Note 10 of the consolidated financial statements.)</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;
</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 41 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We base our fair value estimates on assumptions that we
believe are reasonable but are uncertain and subject to changes in market
conditions. &nbsp;For the purposes of identifying and measuring impairment,
goodwill assets are grouped with other assets and liabilities at the lowest
level for which identifiable cash flows are largely independent of the cash
flow of other assets and liabilities.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We identify two
reporting units for purposes of our annual goodwill impairment testing arising
from our acquisitions of Micro Motors and Astromec </p>
<ul>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:12.0pt;margin-right:0in;margin-bottom:
0in;margin-left:0.25in;margin-bottom:.0001pt;text-align:justify;'>Our Carson City reporting unit corresponds to the operations
resulting from the Astromec acquisition, </p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:12.0pt;margin-right:0in;margin-bottom:
0in;margin-left:0.25in;margin-bottom:.0001pt;text-align:justify;'>Our Irvine reporting unit corresponds to the operations resulting
from the Micro Motors acquisition.&nbsp; </p></li>
</ul>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>During the
preparation of the fiscal year 2010 financial statements, we determined a
triggering event occurred for Micro Motors as new and replacement revenue
sources for a potential loss of our largest customer had not been completed.&nbsp; During
the preparation of the fiscal year 2010 financial statements we also determined
a triggering event for Astromec as it became apparent that the expected product
synergies and resulting financial benefits from the 2006 Astromec acquisition
were not being realized. &nbsp;(See Note 10 of the consolidated financial
statements).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As the fair value of
the reporting units was below the carrying amount at both Astromec and Micro
Motors a step 2 analysis was required.&nbsp; In the step two analysis, it was
determined that all the remaining goodwill for these two reporting units was
impaired.&nbsp; Goodwill impairment associated with Astromec recognized as an
operating expense was $1,887,000. Goodwill impairment associated with Micro
Motors recognized as an operating expense was $1,110,000.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>Long-lived assets</b> </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt; margin-left:0in; margin-right:0in; margin-top:0in'>In accordance with ASC 360
(formerly SFAS&nbsp;No.&nbsp;144, &#147;Accounting for the Impairment or Disposal
for Long-Lived Assets&#148;), we review the recoverability of our long-lived assets,
such as property and equipment, when events or changes in circumstances occur
that indicate the carrying value of the asset group may not be recoverable. The
assessment of possible impairment is based on our ability to recover the
carrying value of the asset or asset group from the expected future pre-tax
cash flows, undiscounted and without interest charges, of the related
operations. If these cash flows are less than the carrying value of such
assets, an impairment loss is recognized for the difference between estimated
fair value and carrying value. The measurement of impairment requires
management to estimate future cash flows and the fair value of long-lived
assets. </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt; margin-left:0in; margin-right:0in; margin-top:0in'>Given the Company&#146;s
lack of a direct dental distribution channel, in fiscal year 2009 third
quarter, it stopped actively promoting the intraosseous dental anesthesia
delivery product (&#147;Intraflow&#148;) that is based on the intangible asset resulting
from the purchase of certain assets from IntraVantage, Inc. in October
2005.&nbsp; Any substantial future value therefore is derived from the
possibility that a company with a direct dental distribution channel (a &#147;Market
Participant&#148;) might be interested in access to the technology through product
purchases, licenses, acquisition, joint venture, or other means.&nbsp; Given
the current economic environment, the general lack of investment in new
products, the limited number of Market Participants to whom this technology
relates, the time and expense necessary to consummate a transaction, and other
factors considered by management, there is also a significant possibility that
no distribution partner will be found, resulting in effectively no value of the
asset.&nbsp; Given this change in circumstance, in accordance with ASC 360 (formerly SFAS No. 144 &#147;Accounting for the
Impairment or Disposal of Long-Lived Assets.&#148;) management tested the carrying
amount of the intangible asset for recoverability as of March 31, 2009.&nbsp; The
result of management&#146;s analysis (based on several scenarios with varying
probabilities of occurring) was that the asset&#146;s value was impaired and,
accordingly, a charge of $997,000 was taken in the fiscal 2009 third
quarter.&nbsp; As market conditions have not improved and no distribution
partner has been found as of December 31, 2009, management concluded that the
asset&#146;s value was further impaired and, accordingly, a charge for the remaining
value of $140,000 was taken in the fiscal 2010 second quarter.&nbsp; </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 42 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=526
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.25pt'>
			<td valign=bottom style='background:white; height:12.25pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px; border-left-style:solid; border-left-width:1px; border-right-style:solid; border-right-width:1px; border-top-style:solid; border-top-width:1px; border-bottom-style:none; border-bottom-width:medium' colspan="5" bordercolor="#000000">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in' align="center">
			<b>Carrying&nbsp;Value</b></p></td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='background:white;height:12.25pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px; border-left-style:solid; border-left-width:1px; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1px' bordercolor="#000000">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;
  height:12.25pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1px' bordercolor="#000000" align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>6/30/2009</p>
			</td>
			<td valign=bottom style='background:white;
  height:12.25pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1px' bordercolor="#000000" align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Amortization</p>
			</td>
			<td valign=bottom style='background:white;
  height:12.25pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1px' bordercolor="#000000" align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Impairment</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:1px solid; border-right:1px solid windowtext;background:white;height:12.25pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000" align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>6/30/2010</p>
			</td>
		</tr>
		<tr style='height:13.0pt'>
			<td valign=bottom style='border-style:solid; border-width:1px; background:#CBDBD1;
  height:13.0pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Intangibles&nbsp;-&nbsp;Patents</p>
			</td>
			<td valign=bottom style='border-style:solid; border-width:1px; background:#CBDBD1;
  height:13.0pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in' align="center">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;147,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-style:solid; border-width:1px; background:#CBDBD1;
  height:13.0pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in' align="center">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7,000)</p>
			</td>
			<td valign=bottom style='border-style:solid; border-width:1px; background:#CBDBD1;
  height:13.0pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in' align="center">$&nbsp;&nbsp;&nbsp;(140,000)</p>
			</td>
			<td valign=bottom style='border-left:1px solid; border-top:1px solid; border-bottom:1px solid; border-right:1px solid windowtext;background:#CBDBD1;height:13.0pt; padding-left:4px; padding-right:4px; padding-top:1px; padding-bottom:1px' bordercolor="#000000">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in' align="center">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>We determined a triggering event occurred with the Carson
City land and building (&#147;the property&#148;) due to the expected undiscounted cash
flows being below the carrying value of the property, indicating impairment.&nbsp; The
fair value is defined pursuant to ASC 820 &#150; <i>Fair Value Measurements</i> as
the price that would be received in an orderly transaction between market
participants at the measurement date.&nbsp; The fair value was estimated based on
market conditions and comparable transactions.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=578
 style='width:82%;margin-left:4.65pt;border-collapse:collapse' id="table18">
		<tr style='height:12.75pt'>
			<td nowrap valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
			<td nowrap colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;border-left:medium none;border-bottom:medium none;
  border-right:1.0pt solid black;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
			<b>Carrying Value</b></p></td>
		</tr>
		<tr style='height:12.75pt'>
			<td nowrap valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
			<td nowrap valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>6/30/2009</p>
			</td>
			<td nowrap valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Depreciation</p>
			</td>
			<td nowrap valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Impairment</p>
			</td>
			<td nowrap valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>6/30/2010</p>
			</td>
		</tr>
		<tr style='height:15.0pt'>
			<td nowrap valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Land</p>
			</td>
			<td nowrap valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 757,000
			</p></td>
			<td nowrap valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
			<td nowrap valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (478,000)</p>
			</td>
			<td nowrap valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 279,000
			</p></td>
		</tr>
		<tr style='height:12.75pt'>
			<td nowrap valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;
  border-right:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Building</p>
			</td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,470,000
			</p></td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
			</td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (829,000)</p>
			</td>
			<td nowrap valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 641,000
			</p></td>
		</tr>
		<tr style='height:12.75pt'>
			<td nowrap valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;
  border-right:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Accumulated Depreciation</p>
			</td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (122,000)</p>
			</td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (38,000)</p>
			</td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -&nbsp;&nbsp; </p></td>
			<td nowrap valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (160,000)</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td nowrap valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;
  border-right:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Total Land &amp; Building,
  net</p></td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,105,000
			</p></td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (38,000)</p>
			</td>
			<td nowrap valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1,307,000)</p>
			</td>
			<td nowrap valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;760,000
			</p></td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;page-break-after:avoid;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";font-weight:bold;text-autospace:ideograph-numeric ideograph-other'>Stock Repurchase Plan</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In September
2002, our Board of Directors authorized the repurchase on the open market of up
to 166,667 shares of our outstanding Common Stock at a share price no greater
than $3.75, subject to compliance with applicable laws and regulations.&nbsp; There
is no requirement that we repurchase all or any portion of such shares.&nbsp; The
maximum total value of the repurchase is not to exceed $166,667.&nbsp; From the
inception of the repurchase authorization through the fiscal year-end date of
June 30, 2003, we repurchased 25,233 shares of Common Stock for $43,741, at an
average price of $1.74 per share.&nbsp; No additional shares were repurchased in
fiscal years 2004 through 2008.&nbsp; During fiscal year 2009, we repurchased 73,232
shares of common stock for $133,472, at an average price of $1.83 per share.
Since the initiation of the buyback program in 2002 through June 30, 2010, we
have repurchased 98,465 shares for $177,213 at an average price of $1.80 per
share. &nbsp;Our Board suspended the buyback authorization in May 2009 and has not
set a reinitiation date for the purchase of our shares pursuant to this
program.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=663
 style='width:100%;border-collapse:collapse' id="table19">
	<tr style='height:13.5pt'>
		<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:1.0pt solid black;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">(a)</font></b></p></td>
		<td valign=bottom style='border-top:1.0pt solid black;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">(b)</font></b></p></td>
		<td valign=bottom style='border-top:1.0pt solid black;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">(c)</font></b></p></td>
		<td valign=bottom style='border-top:1.0pt solid black;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">(d)</font></b></p></td>
	</tr>
	<tr style='height:67.5pt'>
		<td style='border-left:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-right:1.0pt solid black; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">Period</font></b></p></td>
		<td style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">Total Number of <br>Shares Purchased</font></b></p>
		</td>
		<td style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">&nbsp;Average Price <br>Paid Per Share</font></b></p>
		</td>
		<td style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">Total Number of Shares <br>Purchased as Part
  of <br>Publicly Announced Plans <br>or Programs</font></b></p></td>
		<td style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<b><font size="2">Maximum Number <br>(Approximate Dollar
  Value) of <br>Shares that May Yet be <br>Purchased Under the Plans or <br>Programs</font></b></p>
		</td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-left:1.0pt solid black; border-right:1.0pt solid black; border-bottom:1.0pt solid black; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">July 1-31, 2008</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">5,233</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$2.97 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">30,467</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">136,200 ($440,719)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-left:1.0pt solid black; border-right:1.0pt solid black; border-bottom:1.0pt solid black; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">August 1-31, 2008</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,333</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$2.82 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">32,800</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">133,867 ($434,109)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-left:1.0pt solid black; border-right:1.0pt solid black; border-bottom:1.0pt solid black; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">September 1-30, 2008</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">14,076</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$2.61 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">46,876</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">119,790 ($397,335)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-left:1.0pt solid black; border-right:1.0pt solid black; border-bottom:1.0pt solid black; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">October 1-31, 2008</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">12,050</font></p></td>
		<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid black; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$2.07 </font></p></td>
		<td valign=top style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">58,926</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">107,740 ($372,311)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">November 1-30, 2008</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,850</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$1.68 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">61,776</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">104,891 ($367564)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">December 1-31, 2008</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">8,154</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$1.26 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">69,930</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">96,737 ($357,235)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  1.0pt solid black;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">January 1-31, 2009</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2,784</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$1.32 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">72,714</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">93,953 ($352,324)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">February 1-28, 2009</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">4,417</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$1.23 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">77,131</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">89,535 ($349,190)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">March 1-31, 2009</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">7,299</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$1.11 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">84,430</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid black;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">82,236 ($343,994)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  1.0pt solid black;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">April 1-30, 2009</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">14,035</font></p></td>
		<td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$1.21 </font></p></td>
		<td valign=top style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">98,465</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">68,201 ($322,787)</font></p></td>
	</tr>
	<tr style='height:13.5pt'>
		<td valign=top style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  1.0pt solid black;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">FY 2009 Total</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">73,232</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">$1.83 </font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">98,465</font></p></td>
		<td valign=top style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">68,201 ($322,787)</font></p></td>
	</tr>
</table>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 43 -</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;page-break-after:avoid;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman Bold";font-weight:bold;'>
<font face="Times New Roman">Income Taxes</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income taxes are provided on a
liability method whereby deferred tax assets are recognized for deductible
temporary differences, operating losses, and tax credit carry forwards.
Deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of
assets and liabilities and their tax bases. &nbsp;Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more likely
than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment. </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Shipping
and Handling</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The Company includes payments from its customers for shipping and
handling in its net revenues line item in accordance with ASC 605 (formerly Emerging Issues Task Force (&#147;EITF&#148;)
00-10, <i>Accounting for Shipping and Handling Fees and Costs.&nbsp; &nbsp;</i>Shipping
expenses, which consist primarily of payments made to freight companies, are
reported in cost of goods sold.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>Concentration
of Credit Risk</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Financial instruments that potentially subject the Company to credit risk
consist principally of cash and trade receivables.&nbsp; The Company places its cash
with major financial institutions.&nbsp; At June 30, 2010 and 2009 and at various
times throughout 2010 and 2009 the Company had deposits in excess of federally
insured limits.&nbsp; Credit sales are made to resellers located throughout the world,
and account for a substantial portion of trade receivables.&nbsp; Such receivables
are not collateralized, but we do monitor our customer&#146;s payment history.&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Stock Options and Warrants</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We are subject to ASC 718 (formerly SFAS
No. 123 (R) <i>Accounting for Stock-Based Compensation</i> as revised December
2004.)&nbsp; This standard establishes the accounting standards for equity
compensation, and applies to us in the recognition of the cost of stock options
awarded based on the grant-date fair value of those awards.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Under ASC 718, the fair value of
stock-based awards to employees can be calculated through the use of option
pricing models, even though such models were developed to estimate the fair
value of freely tradable, fully transferable options with vesting restrictions
which significantly differ from the Company&#146;s stock option awards.&nbsp; These
models require subjective assumptions, including future stock price volatility
and expected time to exercise, which greatly affect the calculated value.&nbsp; The volatility
assumption is based on historical actual activity, with the future volatility
expected to equal the past volatility.&nbsp; The expected time to exercise is based
on the simplified model of the vesting time plus &frac12; the option life.&nbsp; The
Company&#146;s calculations for the options granted were made using the
Black-Scholes option-pricing model.&nbsp; The calculations are based on a
single-option valuation approach and forfeitures are recognized.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The fair value and
associated compensation cost of each grant is estimated at the grant date using
the Black-Scholes option-pricing model with the following weighted-average
assumptions: no dividend rate for all years; price volatility of 49% to 57% in 2009,
of 41% to 52% in 2010; risk-free interest rates of approximately 2.4% to 3.0%
in 2009 and 3.3% to 4.9% in 2010; and expected lives of five to eight years.&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 44 -</p>
			</td>
		</tr>
	</table></div>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<p style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Use of Estimates</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>The preparation of financial
statements requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>The Company's operations are
affected by numerous factors including market acceptance, changes in
technologies and new laws and government regulations and policies. The Company
cannot predict what impact, if any, the occurrence of these or other events
might have on the Company's operations. Significant estimates and assumptions
made by management include, but are not limited to: revenue recognition, the
allowance for doubtful accounts, warranty reserve, inventory valuation for slow
moving items, the carrying value of long-lived and intangible assets impairment
of goodwill, and the recovery of deferred income tax assets.</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>Significant management judgment
is required to determine our provision for income taxes and the recoverability
of the deferred tax asset.&nbsp; It is based on estimates of future taxable
income by jurisdiction in which the Company operates and the period over which
the deferred tax assets will be recoverable.&nbsp; In the event that actual
results differ from these estimates or we adjust these estimates in future
periods, a valuation allowance may need to be established which could result in
a tax provision equal to the carrying value of the deferred tax assets.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Earnings per Share</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic earnings per common share data has been
computed on the basis of the weighted-average number of common shares
outstanding during each period presented.&nbsp; Diluted per share amounts assume the
conversion, exercise or issuance of all potential common stock instruments unless
the effect is to increase the income or decrease the loss per common share from
continuing operations. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Fair Value of Financial
Instruments</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 7.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<i>Fair
Value Measurements</i>&nbsp;&#151; Effective July&nbsp;1, 2008, the Company adopted ASC 820 (formerly Statement of Financial Accounting
Standards No.&nbsp;157, &#147;Fair Value Measurements&#148;)&nbsp;for financial assets
and liabilities measured at fair value on a recurring basis. &nbsp;(See note 9) &nbsp;ASC 820 defines fair value, establishes a framework
for measuring fair value in accordance with generally accepted accounting
principles, and expands disclosures about fair value measurements. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b><i>&nbsp;</i></b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Research and Development </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 7.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Research and
development supports the development of generic rotary drive, motion control
and electric motor technology platforms.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Advertising</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>Advertising costs are not capitalized, as all
advertising expenditures are recognized in the period incurred as a selling
expense.&nbsp; In the year ended June 30, 2010, we recognized $127,000 for
advertising, compared to $102,000 in the year ended June 30, 2009.&nbsp;&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 3 - BANK DEBT </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>We have a credit facility with Wells
Fargo Bank, N.A. (&#147;Wells Fargo&#148;) and a mortgage with Union Bank of California, N.A (&#147;Union Bank&#148;).</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 45 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<i><u>Wells Fargo Credit Facility</u></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As of June 30,
2010, the Wells Fargo credit facility had two components:&nbsp; </p>
<ul>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;margin-right:0in; margin-top:0in'>a revolving Credit Line Note (&#147;line of credit&#148;) of up to $1,000,000
in borrowing availability, and</p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;margin-right:0in; margin-top:0in'>a Five year Term Note (the &#147;TI Loan&#148;) with an initial balance of&nbsp;
$2,000,000, of which $1,366,667 was outstanding as of June 30, 2010. </p></li>
</ul>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>If borrowings
under the line of credit exceed $500,000, the maximum amount of borrowing is limited
to the lesser of $1,000,000 or 70% of the eligible accounts receivable plus 40%
of the eligible inventory. &nbsp;Its terms require monthly interest payments at
either (i) the prime rate of interest (3.25% at June 30, 2010) plus 1.50%, or
(ii) three-month LIBOR (0.534% at June 30, 2010) plus 2.50%, at our discretion,
based on outstanding borrowings.&nbsp; The line of credit expires on November
1, 2010.&nbsp; We are charged an unused credit line fee of 1.5% per annum payable
quarterly on the average balance of the line of credit that is not used.
<font style="font-size: 10.0pt">&nbsp;</font>There was no outstanding balance under the
credit line as of June 30, 2010.&nbsp; The total eligible additional borrowing
capacity under the line of credit as of June 30, 2010 was $1,000,000.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The TI Loan had
an initial balance of $2,000,000.&nbsp; The borrowings from this term
commitment were used for construction of tenant improvements for our Irvine, California facility.&nbsp; Its terms require monthly principal and interest
payments over the 60-month life of the loan, based on outstanding
borrowings.&nbsp; The interest rate is fixed at 5.72% over the life of the
loan.&nbsp; There was a $1,366,667 outstanding balance under the TI Loan as of June
30, 2010.&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>All assets of
the Company except our Carson City land and building secure the outstanding
borrowings under the Wells Fargo credit facility.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><i><u>Union Bank Mortgage</u></i></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>In March 2006, we entered into a ten-year mortgage with Union Bank for
$1,650,000.&nbsp; The principal balance of the mortgage bears interest at a
fixed annual rate of 6.73%.&nbsp; Payments on the mortgage are $11,379 per
month (based on a 25 year amortization), with the balance of $1,291,666 in
principal due on April&nbsp;1, 2016.&nbsp; The mortgage is secured by our Carson City land and building.&nbsp; There was $1,528,000 in principal outstanding under
the mortgage as of June 30, 2010.&nbsp; On September 16, 2010, we paid the remaining
$1,519,000 balance due on the mortgage, fully retiring such indebtedness.&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>There are
certain financial and non-financial covenants that the Company must meet to be
in compliance with the terms of the Wells Fargo credit facility and mortgage
with Union Bank.&nbsp; As of the year ended June 30, 2010, we were in violation of
the Wells Fargo annual net income, the quarterly earnings before tax and fixed
charge coverage covenants.&nbsp; Wells Fargo waived these violations by a letter
agreement on September 17, 2010.&nbsp; We were in compliance with the Union Bank financial
covenant, however the Wells violation triggered a cross-default under the Union
Bank agreement as of June 30, 2010 that was waived on September 21, 2010. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 4 - COMMITMENTS AND
CONTINGENCIES </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>The Company leases its existing
office and warehouse facilities in Irvine, California and Beaverton, Oregon.&nbsp; The Irvine lease expires in March 2018 and the Beaverton lease expires in April
2014. &nbsp;These leases require the Company to pay insurance, taxes, and other
expenses related to the leased space.&nbsp; Total rent expense in 2010 and 2009 was
$568,000 and $572,000, respectively.&nbsp; Future minimum lease payments for the
fiscal year ending June 30 are: </p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 46 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=194
 style='width:50%;border-collapse:collapse'>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  background:#CBDBD1;padding:1.1pt;' align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>2011</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="142">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>488,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>2012</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="142">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>508,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>2013</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="142">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>527,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>2014</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="142">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>532,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.6pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>2015</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="142">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>478,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in' align="center">2016-2018</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="142">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,399,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in' align="center">Total</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="142">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3,932,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Our manufacture and distribution of certain products involves a risk of
legal action, and, from time to time, we are named as defendants in lawsuits.
It is not reasonably possible to estimate the awards or damages, or the range
of awards or damages, if any, we might incur in connection with such
litigation.&nbsp; Other than the case pending with the Orange County Water District
discussed below, management is not aware of any material actual, pending or
threatened litigation at this time.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>On June 23,
2008, the Orange County Water District (&#147;OCWD&#148;) filed a complaint in the
Superior Court of the State of California in the County of Orange concerning
remediation of alleged ground water contamination in the Orange County
Groundwater South Basin; <u>Orange County Water District v. Sabic Innovative
Plastics U.S. LLC, et al.</u>, Case No. 00078246.&nbsp; The South Basin underlies parts of Santa Ana, California and adjacent cities.&nbsp; The complaint identifies
17 named defendants, including Pro-Dex, and also designates 400 unnamed Doe
defendants.&nbsp; We moved out of this Santa Ana site in April, 2008 and have no
remaining operations there.&nbsp; Since January 1, 2009, OCWD has named 11
additional defendants by multiple amendments to its complaint.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The complaint
alleges that the defendants contaminated the South Basin with volatile organic
chemicals (&#147;VOCs&#148;) and perchlorate through various activities at properties
each defendant now controls or has controlled in the past.&nbsp; Through its
lawsuit, the OCWD seeks compensatory relief for all its own remedial activities,
and injunctive relief to compel the defendants to undertake remedial activities
in general.&nbsp; The complaint does not, however, specify any remedial activities
that the OCWD has undertaken to date or any remedial activities that it seeks
any particular defendants to undertake.&nbsp; Moreover, from our investigation of
OCWD&#146;s remedial activities to date, we have determined that the OCWD is in the
early stages of its remedial investigation for the South Basin groundwater
contamination.&nbsp; In two recent Case Management Conferences before the court,
OCWD has refused defendants&#146; request to designate a date by which it will
disclose its proposed soil and groundwater cleanup remedies.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As noted above,
27 other entities are named defendants in this case along with Pro-Dex.&nbsp; While
some are small businesses, others are larger corporations or their
subsidiaries.&nbsp; Further, as this case progresses, the OCWD is likely to add at
least a few more named defendants to the case from the 400 Doe defendants it
has designated in the current complaint.&nbsp; In the indeterminable event that we
would be held liable in the case, OCWD&#146;s total recovery probably would be
allocated among several defendants, each of which would pay only a
proportionate share of that total recovery.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>One of our past insurers
has committed to pay most of our defense costs for the lawsuit, and has done so
to date, while reserving its rights as to whether it will cover any damages
awarded against us, or any settlement payment to which Pro-Dex agrees to
resolve the lawsuit, under past policies issued to us for a three-year period,
March 31, 1983 to March 31, 1986.&nbsp; The policies of these years
have&nbsp;occurrence payment limits of $500,000.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 47 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Overall, the
OCWD complaint remains vague, the OCWD is in an early stage of its remedial
activities in the South Basin, the lawsuit is in the early stages of discovery,
one of our insurers has committed to pay most defense costs and has reserved
rights under one&nbsp;three-year set of&nbsp;policies and is continuing to
consider extending coverage to us under other past policies, and any recovery
the OCWD may gain through the lawsuit is likely to be allocated among several
defendants.&nbsp; Therefore, our liabilities, as well as our costs of
defending, monitoring and concluding our involvement in this case are
uncertain, and those costs cannot now be estimated.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 5 - INCOME TAXES </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>The provisions
for income taxes for the years ended June 30, 2010 and 2009 are as follows: </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=382
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  background:#FFFFFF;padding:1.1pt' width="15%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt' width="37%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:white;padding:1.1pt;' width="15%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="37%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="15%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Current:</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="37%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="15%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="37%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Federal</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  ' width="1%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="23%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(227,000)</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  ' width="1%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="22%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>97,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="15%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="37%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>State</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(22,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(14,000)</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="15%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Deferred:</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="37%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="15%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="37%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Federal</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(141,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>587,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:13.4pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:white;padding:1.1pt;' width="15%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="37%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>State</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(30,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>471,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td colspan=2 valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Provision&nbsp;for&nbsp;Income&nbsp;taxes</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; ' width="1%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="23%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(420,000)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; ' width="1%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="22%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,141,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'><b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";text-indent:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>A reconciliation of the expected tax to the amount
computed by applying the federal statutory income tax rates to income before
income taxes is as follows: </p>
<p style='margin:0in;margin-bottom:.0001pt;text-indent:.5in;text-autospace:none;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=585
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:medium none; background:#FFFFFF; padding:1.1pt' width="550">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="550">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Federal&nbsp;income&nbsp;tax&nbsp;provision&nbsp;at&nbsp;the&nbsp;statutory&nbsp;rate</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(1,152,000)</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(579,000)</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Change&nbsp;in&nbsp;valuation&nbsp;allowance&nbsp;for&nbsp;deferred&nbsp;tax&nbsp;assets</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>710,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>2,241,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>State&nbsp;income&nbsp;taxes,&nbsp;net&nbsp;of&nbsp;federal&nbsp;tax&nbsp;benefit</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(122,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(275,000)</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Tax&nbsp;incentives</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(467,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(255,000)</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Goodwill&nbsp;impairment</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>322,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Non-deductible&nbsp;items</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>88,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>28,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Unrecognized&nbsp;tax&nbsp;benefits</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>176,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(19,000)</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Other</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>25,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; ' width="550">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>(Benefit&nbsp;from)/Provision&nbsp;for&nbsp;income&nbsp;taxes</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(420,000)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,141,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>Deferred income
tax assets and liabilities in the accompanying consolidated balance sheet at June
30, 2010 and 2009 are as follows: </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=484
 style='width:75%;border-collapse:collapse' id="table9">
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-right:medium none; background:#FFFFFF; padding:1.1pt' width="2%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt' width="50%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td colspan=2 valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Deferred&nbsp;tax&nbsp;assets/(liabilities)&nbsp;current:</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="2%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="50%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Deferred&nbsp;tax&nbsp;assets</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="2%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="50%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Accrued&nbsp;expenses</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;' width="10%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="13%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>609,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;' width="6%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="16%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>316,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="2%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="50%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Inventories</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>581,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>830,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="2%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="50%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Net&nbsp;operating&nbsp;losses</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>112,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>680,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="2%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="50%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>State&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(13,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>87,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="2%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="50%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Income&nbsp;tax&nbsp;credit&nbsp;carry&nbsp;forwards</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Total&nbsp;deferred&nbsp;tax&nbsp;assets&nbsp;(current)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,289,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,913,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.65pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Valuation&nbsp;Allowance</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(1,080,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(1,297,000)</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="2%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="50%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.7pt'>
			<td colspan=2 valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Current&nbsp;Deferred&nbsp;tax&nbsp;assets,&nbsp;net</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; ' width="10%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="13%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>209,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; ' width="6%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="16%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>616,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 48 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=556
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Deferred&nbsp;tax&nbsp;assets/(liabilities)&nbsp;non-current:</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Deferred&nbsp;rent</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>105,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>87,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Intangible&nbsp;assets</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,178,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>493,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Non-cash&nbsp;stock&nbsp;based&nbsp;comp</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>16,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Income&nbsp;tax&nbsp;credit&nbsp;carry&nbsp;forwards</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>748,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>569,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>State&nbsp;taxes</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>24,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(76,000)</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Depreciation</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(393,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(932,000)</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Total&nbsp;deferred&nbsp;tax&nbsp;assets&nbsp;(non-current)</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,662,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>157,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Valuation&nbsp;allowance</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1px solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(1,871,000)</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1px solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(944,000)</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td colspan=2 valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Non-Current&nbsp;Deferred&nbsp;tax&nbsp;assets/(liabilities)&nbsp;,&nbsp;net</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:medium none windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:white; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(209,000)</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(787,000)</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in;
text-autospace:none'><b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We have state net operating loss carry forwards for June 30, 2010 and
2009 of $1,541,000 and $2,305,000, respectively.&nbsp; The Company has federal tax
credits of $337,000 and $276,000 for June 30, 2010 and 2009, respectively, and
state tax credits of $411,000 and $285,000 for June 30, 2010 and 2009,
respectively.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Significant management judgment is required in determining our provision
for income taxes and the recoverability of our deferred tax asset.&nbsp; Such
determination is based primarily on our historical taxable income, with some
consideration given to our estimates of future taxable income by jurisdictions
in which we operate and the period over which our deferred tax assets will be
recoverable.&nbsp; Due to cumulative taxable losses during the past three years, we
recorded $2,241,000 valuation allowance against our deferred tax assets in the
year ended June 30, 2009 and an additional $710,000 in 2010.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>A reconciliation of the beginning and ending amount of valuation
allowance is as follows: </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=536
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.05pt'>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;' width="67%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Balance&nbsp;at&nbsp;July&nbsp;1,&nbsp;2009</p>
			</td>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(2,241,000)</p>
			</td>
		</tr>
		<tr style='height:12.05pt'>
			<td valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Increase&nbsp;in&nbsp;tax&nbsp;asset&nbsp;valuation&nbsp;allowance</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(710,000)</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Balance&nbsp;at&nbsp;June&nbsp;30,&nbsp;2010</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; ' width="1%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:medium none;
  background:#CBDBD1;padding:1.1pt;' width="19%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(2,951,000)</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The change in valuation allowance is due primarily to the change in the
Company&#146;s deferred tax assets and liabilities resulting from the revaluation of
land and buildings and from the impairment of goodwill.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>As of June 30, 2010, pursuant to ASC 740 (formerly FASB<font style="font-size: 10.0pt">
</font>Interpretation No.&nbsp;48, &#147;Accounting for
Uncertainty in Income Taxes), we have accrued $230,000 of unrecognized tax
benefits related to state income tax matters that would reduce the Company&#146;s
income tax expense if recognized and would result in a corresponding decrease
in the Company&#146;s effective tax rate.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>A reconciliation of the beginning and ending amount of
unrecognized tax benefits is as follows:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=531
 style='width:75%;border-collapse:collapse' id="table10">
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Balance&nbsp;at&nbsp;July&nbsp;1,&nbsp;2009</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>54,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.05pt'>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Additions&nbsp;based&nbsp;on&nbsp;tax&nbsp;positions&nbsp;related&nbsp;to&nbsp;the&nbsp;current&nbsp;year</p>
			</td>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>31,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Additions&nbsp;for&nbsp;tax&nbsp;positions&nbsp;of&nbsp;prior&nbsp;years</p>
			</td>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>145,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.05pt'>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Reductions&nbsp;for&nbsp;tax&nbsp;positions&nbsp;of&nbsp;prior&nbsp;years</p>
			</td>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.0pt'>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Settlements</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Balance&nbsp;at&nbsp;June&nbsp;30,&nbsp;2010</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:medium none;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>230,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We recognize accrued interest and penalties related to unrecognized tax
benefits in income tax expense. As of June 30, 2010, there was no interest or
penalties applicable to our unrecognized tax benefits since the company has
sufficient tax attributes available to fully offset any potential assessment of
additional tax.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 49 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Pro-Dex and its subsidiaries are subject to U.S. federal income tax, as
well as income tax of multiple state tax jurisdictions. We are currently open to
audit under the statute of limitations by the Internal Revenue Service for the
years ended June 30, 2007 and later.&nbsp; Our state income tax returns are open
to audit under the statute of limitations for the years ended June 30, 2006 and
later. We do not anticipate a significant change to the total amount of
unrecognized tax benefits within the next 12 months. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 6 - SHARE-BASED
COMPENSATION</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Stock Options </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The Board of Directors and the shareholders of the Company have approved
and adopted two equity compensation plans, pursuant to which (i) options to
purchase common stock or ii) restricted shares, may be granted up to an
aggregate amount of 833,333 shares of common stock to officers, directors, and
employees of the Company.&nbsp; Upon its adoption, the employee stock option plan
had 666,667 shares of common stock available for issuance and the directors&#146;
plan had 166,667 shares of common stock available for issuance.&nbsp; The option
plans are substantially similar, call for vesting as approved by the Board of
Directors of six months for directors and up to five years for employees, and
allow for the options to be outstanding for a period of up to ten years but are forfeited 30 days after
the holder ceases to be an employee and are forfeited 90 days after the holder
ceases to be director<font style="font-size: 9.5pt">.&nbsp; </font>There are options
to purchase 113,349 shares remaining under the employee option plan and options
to purchase 23,334 shares remaining under the directors option plan for a total
of 156,682 shares remaining under both option plans at June 30, 2010, that are
available to grant in future years.&nbsp; New shares are issued as such options are
exercised or restricted shares are granted.&nbsp; Share-based compensation expense
reduced the Company&#146;s results of operations as shown:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=633
 style='width:75%;border-collapse:collapse' id="table11">
		<tr style='height:12.3pt'>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  background:#FFFFFF;padding:1.1pt' width="7%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt' width="56%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Fiscal&nbsp;Year&nbsp;ended&nbsp;June&nbsp;30,</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:white;padding:1.1pt;' width="7%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="56%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Share-based&nbsp;compensation&nbsp;expense&nbsp;recognized:</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="7%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="56%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>General&nbsp;and&nbsp;administrative,&nbsp;options</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>23,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>49,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="7%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="56%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>General&nbsp;and&nbsp;administrative,&nbsp;restricted&nbsp;stock</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>78,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>117,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Subtotal&nbsp;expense</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>101,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>166,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="7%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="56%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Related&nbsp;deferred&nbsp;tax&nbsp;benefit</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td colspan=2 valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Decrease&nbsp;in&nbsp;net&nbsp;income</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>101,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>166,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:7.25pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="7%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="56%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Decrease&nbsp;in&nbsp;basic&nbsp;earnings&nbsp;per&nbsp;share</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:1.1pt;
  ' width="4%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="14%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0.03&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:1.1pt;
  ' width="4%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="13%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0.05&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td colspan=2 valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Decrease&nbsp;in&nbsp;diluted&nbsp;earnings&nbsp;per&nbsp;share</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="4%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="14%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0.03&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="4%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;' width="13%">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0.05&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.3pt'>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;' width="7%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border:medium none;background:
  #CBDBD1;padding:1.1pt;' width="56%">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>As of June 30, 2010, there was $24,000 of total unrecognized compensation
cost related to 34,167 non vested outstanding stock options with a per share
weighted average value of $2.88.&nbsp; The unrecognized expense is anticipated to be
recognized on a straight-line basis over a weighted average period of 0.7
years.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following is a summary of stock option activity:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=714
 style='width:100%;border-collapse:collapse' id="table12">
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  background:#FFFFFF;padding:1.1pt' width="38%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=4 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=4 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="38%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium' width="13%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Weighted-Average</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  ' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;' width="11%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-bottom-style:none; border-bottom-width:medium' width="1%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Weighted-</p>
		</td>
	</tr>
	<tr style='height:14.2pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none windowtext;border-right:
  medium none;background:#CBDBD1;padding:1.1pt' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Fixed&nbsp;Options</u></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#CBDBD1; padding:1.1pt' width="13%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Shares</u></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#CBDBD1; padding:1.1pt' width="2%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#CBDBD1; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Exercise&nbsp;Price</u></p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#CBDBD1; padding:1.1pt' width="11%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Shares</u></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#CBDBD1; padding:1.1pt' width="1%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:medium none windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Exercise&nbsp;Price</u></p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Outstanding&nbsp;at&nbsp;beginning&nbsp;of&nbsp;year</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium' width="13%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>311,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-left-style:none; border-left-width:medium; border-top-style:none; border-top-width:medium' width="9%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border:medium none;background:white;
  padding:1.1pt;' width="6%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.26&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  ' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium' width="11%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>369,833&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="1%">&nbsp;</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-left-style:none; border-left-width:medium; border-top-style:none; border-top-width:medium' width="3%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="12%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.74&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Granted</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-right-style:none; border-right-width:medium' width="13%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>22,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:#CBDBD1; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-left-style:none; border-left-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1.57&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-right-style:none; border-right-width:medium' width="11%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>35,333&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:#CBDBD1; padding:1.1pt; ' width="1%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1.86&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Exercised</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium' width="13%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt; border-left-style:none; border-left-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  ' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium' width="11%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="1%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
	</tr>
	<tr style='height:14.95pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Forfeited</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="13%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(139,167)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#CBDBD1; padding:1.1pt' width="2%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.29&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="11%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(94,167)</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#CBDBD1; padding:1.1pt' width="1%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>5.25&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Outstanding&nbsp;at&nbsp;end&nbsp;of&nbsp;year</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium' width="13%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>193,833&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-left-style:none; border-left-width:medium' width="9%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border:medium none;background:white;
  padding:1.1pt;' width="6%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3.94&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  ' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium' width="11%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>311,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="1%">&nbsp;</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-left-style:none; border-left-width:medium' width="3%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="12%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.26&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="38%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-right-style:none; border-right-width:medium' width="13%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:#CBDBD1; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-left-style:none; border-left-width:medium'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-right-style:none; border-right-width:medium' width="11%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:#CBDBD1; padding:1.1pt; ' width="1%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Exercisable&nbsp;at&nbsp;end&nbsp;of&nbsp;year</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium' width="13%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>173,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-left-style:none; border-left-width:medium' width="9%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;' width="6%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.08&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  ' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium' width="11%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>276,917&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="1%">&nbsp;</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-left-style:none; border-left-width:medium' width="3%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="12%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.38&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="38%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-right-style:none; border-right-width:medium' width="13%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:#CBDBD1; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-left-style:none; border-left-width:medium'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;' width="11%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; border-top-style:none; border-top-width:medium' width="1%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; ' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Weighted-average&nbsp;fair&nbsp;value&nbsp;per</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-right-style:none; border-right-width:medium' width="13%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-style:none; border-width:medium; background:white; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt; border-left-style:none; border-left-width:medium'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  ' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;' width="11%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;' width="1%">&nbsp;</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:#CBDBD1;padding:1.1pt;' width="38%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Option&nbsp;granted&nbsp;during&nbsp;the&nbsp;year</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="13%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="2%">&nbsp;</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="9%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="6%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0.66&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="2%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="11%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="1%">&nbsp;</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; ' width="3%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;' width="12%">
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>0.84&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 50 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br
clear=all style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following table summarizes information regarding options outstanding
and options exercisable at June 30, 2010: </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=733
 style='width:100%;border-collapse:collapse'>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  background:#FFFFFF;padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=6 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Options&nbsp;Outstanding</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=5 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Options&nbsp;Exercisable</p>
		</td>
	</tr>
	<tr style='height:25.35pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Weighted-</p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Average</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Weighted-</p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Average</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Aggregate</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Weighted-</p>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Average</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Aggregate</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Range&nbsp;of</p>
		</td>
		<td valign=bottom style='background:#FFFFFF;padding:
  1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Number</p>
		</td>
		<td valign=bottom style='background:#FFFFFF;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Remaining</p>
		</td>
		<td colspan=2 valign=bottom style='background:#FFFFFF;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Exercise</p>
		</td>
		<td colspan=2 valign=bottom style='background:#FFFFFF;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Intrinsic</p>
		</td>
		<td valign=bottom style='background:#FFFFFF;
  padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#FFFFFF;padding:
  1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Number</p>
		</td>
		<td colspan=2 valign=bottom style='background:#FFFFFF;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Exercise</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Intrinsic</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none windowtext;border-right:
  medium none;background:white;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Exercise&nbsp;Price</u></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Outstanding</u></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Contractual&nbsp;Life</u></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Price</u></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Value</u></p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Outstanding</u></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Price</u></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:medium none windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Value</u></p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>$1.26&nbsp;to&nbsp;$2.43</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt; height:15pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>83,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>5.5&nbsp;years</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border:medium none;background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1.68&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border:medium none;background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>29,050&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt; height:15pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>71,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border:medium none;background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1.45&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt; height:15pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>24,790&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>$3.00&nbsp;to&nbsp;$4.68</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>61,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>6.1&nbsp;years</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.18&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>52,000&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3.55&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>$5.22&nbsp;to&nbsp;$5.76</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>20,000&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>4.5&nbsp;years</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>5.51&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>20,000&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>5.51&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
	</tr>
	<tr style='height:14.95pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>$7.65&nbsp;to&nbsp;$9.90</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>30,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>5.0&nbsp;years</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>8.66&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>30,000&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>8.66&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:#CBDBD1;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Total</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>194,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>4.2&nbsp;years</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3.94&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>29,050&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>173,000&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.08&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt; height:15pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>24,790&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Restricted Stock</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>In connection with the employment agreement with our Chief Executive
Officer, a restricted stock grant of 113,334 shares of common stock was made in
February 2007. &nbsp;These shares vest in four equal installments of 25% or 28,333 shares
per year over 4 years.&nbsp; The common stock price at the date of the grant was $4.14.&nbsp;
New shares are issued with the vesting of each installment of restricted
stock.&nbsp; The fair value of the grant is calculated as the number of shares multiplied
by the grant price.&nbsp; The compensation expense is recognized over the vesting
period of the grant.&nbsp; Approximately $78,000 in compensation expense for the
restricted stock was recognized in fiscal year 2010.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following is a summary of restricted share activity:</p>&nbsp;<table class=MsoNormalTable border=0 cellpadding=0 width=657
 style='width:100%;border-collapse:collapse' id="table13">
	<tr style='page-break-inside:avoid;height:.05pt'>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-right:medium none; background:#FFFFFF; padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=3 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
		</td>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in' align="center">
		2009</p>
		</td>
	</tr>
	<tr style='height:17.15pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border:medium none;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Weighted-Average</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;Weighted-Average</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-right:
  medium none;background:#FFFFFF;padding:1.1pt; border-bottom-color:windowtext'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Restricted&nbsp;shares</u></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Shares</u></p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Exercise&nbsp;Price</u></p>
		</td>
		<td valign=bottom style='background:#FFFFFF;
  padding:1.1pt; border-bottom-style:solid; border-bottom-width:1px'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:medium none windowtext; background:#FFFFFF; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Shares</u></p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt; border-bottom-color:windowtext'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<u>Exercise&nbsp;Price</u></p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; border-top-color:inherit'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Outstanding&nbsp;at&nbsp;beginning&nbsp;of&nbsp;year</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>28,333&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border:medium none;background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.14&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt; border-top-style:solid; border-top-width:1px'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt; border-top-style:none; border-top-width:medium'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>56,667&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; border-top-color:inherit'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.14&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Granted</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Vested</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(28,333)</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.14&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>(28,333)</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.14&nbsp;</p>
		</td>
	</tr>
	<tr style='height:14.9pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;Forfeited</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:2.25pt double windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:2.25pt double windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Outstanding&nbsp;at&nbsp;end&nbsp;of&nbsp;year</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:1.1pt;
  '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>28,333&nbsp;</p>
		</td>
		<td valign=bottom style='background:white;padding:
  1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4.14&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.7pt'>
		<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:12.65pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Exercisable&nbsp;at&nbsp;end&nbsp;of&nbsp;year</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
		<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>As of June 30, 2010, there was no unrecognized compensation cost related
to non vested outstanding restricted shares as all restricted shares have
vested and were exercised.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>NOTE 7 - NET INCOME PER SHARE </b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-top:6.0pt;text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Potentially
dilutive securities are not included in the diluted loss per share calculation
due to net losses from continuing operations in the last two years so there is
no difference to reconcile for the weighted average shares outstanding for
basic and diluted net income per share for the years ended June 30.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Potentially dilutive securities not included in the diluted loss per
share calculation due to net losses from continuing operations and for options
that have a strike price higher than the market price for our common stock (no
intrinsic value) are as follows:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 51 -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<table class=MsoNormalTable border=0 cellpadding=0 width=637
 style='width:100%;border-collapse:collapse'>
	<tr style='page-break-inside:avoid;height:.05pt'>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:1.1pt;
  '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#FFFFFF;padding:1.1pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2010</font></p></td>
		<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">2009</font></p></td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;Options&nbsp;to&nbsp;purchase&nbsp;common&nbsp;shares</font></p>
		</td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">601,956&nbsp;</font></p></td>
		<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">278,598&nbsp;</font></p></td>
	</tr>
	<tr style='height:11.5pt'>
		<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">&nbsp;&nbsp;&nbsp;Restricted&nbsp;Shares</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">-&nbsp;</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">16,998&nbsp;</font></p></td>
	</tr>
	<tr style='height:11.45pt'>
		<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:white; padding:1.1pt; '>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">Total&nbsp;potentially&nbsp;dilutive&nbsp;securities&nbsp;not&nbsp;included</font></p>
		</td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">601,956&nbsp;</font></p></td>
		<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
		<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
		<font size="2">295,595&nbsp;</font></p></td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>NOTE 8 - MAJOR CUSTOMERS</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We had two major customers (defined as a customer that represented
greater than 10% of the Company&#146;s total revenues) in the year ended June 30,
2010 and 2009.&nbsp;&nbsp; </p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=519
 style='width:75%;border-collapse:collapse'>
		<tr style='page-break-inside:avoid;height:.05pt'>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=5 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Year&nbsp;ended&nbsp;June&nbsp;30,</p>
			</td>
			<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2010</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=4 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>2009</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Revenues</p>
			</td>
			<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Accts.&nbsp;Rec.</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Revenues</p>
			</td>
			<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Accts.&nbsp;Rec.</p>
			</td>
		</tr>
		<tr style='height:12.45pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:medium none;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Customer&nbsp;1</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border:medium none;background:white;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4,770,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>365,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>4,232,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>513,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.4pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-right:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-top:medium none; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Customer&nbsp;2</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>9,268,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>1,097,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>6,530,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>730,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in; margin-left:0in; margin-right:0in'>In December, 2009 our largest customer informed us that is
was in the process of developing, and planned to eventually manufacture, its
own surgical hand pieces which are functionally comparable to the two products
currently provided to the customer by the Company.&nbsp; Pro-Dex has been the
exclusive manufacturer of these products since they were developed.</p>
<p style='font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in; margin-left:0in; margin-right:0in'>We currently provide the Customer with two products (&#147;Product
A&#148; and &#147;Product B&#148;) and repair services for such
products.&nbsp; Total revenue shipped in the last two fiscal years by each of these
categories is as follows:</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=485
 style='width:75%;margin-left:4.65pt;border-collapse:collapse' id="table20">
		<tr style='height:17.25pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid black;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Revenues during the 12
  months ended</p></td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:medium none;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Average % of Total</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
			<u>6/30/2010</u></p></td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>
			<u>6/30/2009</u></p></td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Product A</p>
			</td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$4,398,000
			</p></td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$2,851,000
			</p></td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>46%</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Product B</p>
			</td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$3,965,000
			</p></td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$2,717,000
			</p></td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>42%</p>
			</td>
		</tr>
		<tr style='height:13.5pt'>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Repairs</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$905,000
			</p></td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$962,000
			</p></td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in' bgcolor="#CBDBD1">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>12%</p>
			</td>
		</tr>
		<tr style='height:12.75pt'>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$9,268,000
			</p></td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$6,530,000
			</p></td>
			<td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>100%</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The customer has indicated that it has successfully
developed, tested, and released its version of Product A and is currently
shipping such product to new accounts.&nbsp; The customer has also indicated that it
intends to continue to purchase from Pro-Dex sufficient levels of Product A to
support replacement units for its existing customers in the U.S. and Europe
through at least the end of calendar year 2011 and will also use the Pro-Dex
Product A for all requirements in the South American market through approximately
the end of fiscal year 2012.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Regarding Product B, a more complex device, the customer
has indicated that the development and testing of that Product has been less successful
and that the Company can expect continued orders from the customer for Product
B through the end of calendar year 2011.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>Lastly, the customer has indicated that it intends to
continue to use Pro-Dex&#146;s repair services for all Pro-Dex products for an
undetermined period, except in South America, where it will purchase components
from Pro-Dex to do its own repairs locally.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;margin-left:0in; margin-right:0in; margin-top:0in'>-52-</p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<p style="font-size: 12.0pt; font-family: Times New Roman; text-align: center; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>As a result of the foregoing, we expect that approximately
one-third of the revenue attributable to this customer during calendar year
2011 could move toward them.&nbsp; However, the customer is not obligated to abide
by the timetables it has currently expressed to us or to update us as to the
status of its product development efforts.&nbsp; Accordingly, we are unable to know
or predict the status of the customer's initiative on an ongoing basis.&nbsp; The
customer could accelerate, delay or terminate its transition to its own
products at any time and without notice to us, which could have a further
material impact on our revenues.&nbsp; The identity of the customer is protected by
a confidentiality agreement.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The Company intends to find additional business and reduce
its operating costs as necessary to minimize the impact of a potential revenue
reduction.&nbsp; In the event that the Customer's future purchases are reduced
beyond the additional business won and the cost savings realized, the Company
is likely to experience a material and adverse impact on its business.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>NOTE 9 - FAIR VALUE MEASUREMENTS</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>&nbsp;</b></p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b><i>Fair Value
Measurements</i>&nbsp;&#151; Effective July&nbsp;1, 2008, the Company adopted ASC 820 (formerly Statement of Financial Accounting
Standards No.&nbsp;157, &#147;Fair Value Measurements&#148;)&nbsp;for financial assets
and liabilities measured at fair value on a recurring basis. &nbsp;ASC 820 defines fair value, establishes a framework
for measuring fair value in accordance with generally accepted accounting
principles, and expands disclosures about fair value measurements. &nbsp;In addition
to expanding the disclosures surrounding fair value measurements, ASC 820 indicates that fair value represents the
amount that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants. As such, fair value is
determined based upon assumptions that market participants would use in pricing
an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as
follows: </p>
<ul>
	<li>
	<p style='text-autospace:none;font-size:12.0pt;font-family:"HelveticaNeue LT 55 Roman";margin-left:0.25in;text-align:justify;margin-right:0in'>
	<font face="Times New Roman">Level 1 - Valuations based on unadjusted quoted prices in
active markets for identical assets or liabilities that the Company has the
ability to access. </font></p></li>
	<li>
	<p style='text-autospace:none;font-size:12.0pt;font-family:"HelveticaNeue LT 55 Roman";margin-left:0.25in;text-align:justify;margin-right:0in'>
	<font face="Times New Roman">Level 2 - Valuations
based on quoted prices in markets that are not active or for which all
significant inputs are observable, either directly or indirectly. </font></p>
	</li>
	<li>
	<p style='text-autospace:none;font-size:12.0pt;font-family:"HelveticaNeue LT 55 Roman";margin-left:0.25in;text-align:justify;margin-right:0in'>
	<font face="Times New Roman">Level 3 - Valuations
based on inputs that are unobservable and significant to the overall fair value
measurement.</font></p></li>
</ul>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In many cases, a
valuation technique used to measure fair value includes inputs from multiple
levels of the fair value hierarchy described above. The lowest level of
significant input determines the placement of the entire fair value measurement
in the hierarchy. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following valuation methodology was used for the company&#146;s assets to
measure fair value at June 30, 2010:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'><i>Cash and cash equivalents:&nbsp; </i>The carrying value of cash and cash
equivalents is considered to be representative of their fair values based on
the short term nature of these instruments.&nbsp; As such these investments are
classified within level 1 of the valuation hierarchy.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>Although the methods above may produce a fair value calculation that may
not be indicative of the net realizable value or reflective of future fair
values, the Company believes its valuation methods are appropriate.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The use of different methodologies or assumptions to determine the fair
value of certain financial instruments could result in a different fair value
measurement at the reporting date.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>-53-</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following fair value hierarchy table presents information about the Company&#146;s
assets measured at fair value on a recurring basis as of June 30, 2010:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=523
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-left:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-right:medium none; background:#FFFFFF; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Description</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Level&nbsp;1</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Level&nbsp;2</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Level&nbsp;3</p>
			</td>
			<td colspan=2 valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Total</p>
			</td>
		</tr>
		<tr style='height:7.9pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:white;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Cash&nbsp;and&nbsp;cash&nbsp;equivalents</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3,794,000&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3,794,000&nbsp;</p>
			</td>
		</tr>
		<tr style='height:7.9pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=bottom style='border-top:medium none;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.25pt'>
			<td valign=bottom style='border-top:medium none;border-left:
  1.0pt solid windowtext;border-bottom:1.0pt solid windowtext;border-right:
  medium none;background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Total</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3,794,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>-&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>$</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>3,794,000&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We determined a triggering event occurred with the Carson City land and
building (&#147;the property&#148;) due to the expected undiscounted cash flows being
below the carrying value of the property, indicating impairment.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>We based the fair value of our Carson City land and building on estimated
prices in an inactive market, where indications of prices can be observed
indirectly from other transactions. &nbsp;The fair value was estimated based on
current market conditions as the price that would be received in an orderly
transaction between market participants at the measurement date.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>The following fair value hierarchy table presents information about the
Company&#146;s assets measured at fair value on a nonrecurring basis as of June 30,
2010:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<div align="center">
	<table class=MsoNormalTable border=0 cellpadding=0 width=485
 style='width:75%;border-collapse:collapse'>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:1.0pt solid windowtext;border-bottom:medium none;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
			<b>June&nbsp;30,&nbsp;2010</b></p></td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-bottom:medium none; border-top:1.0pt solid windowtext; background:#FFFFFF; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
			<b>Fair&nbsp;Value</b></p></td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
			<b>Level&nbsp;1</b></p></td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
			<b>Level&nbsp;2</b></p></td>
			<td valign=bottom style='border-top:1.0pt solid windowtext;
  border-left:medium none;border-bottom:1.0pt solid windowtext;border-right:medium none;
  background:#FFFFFF;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-right:1.0pt solid windowtext; border-top:1.0pt solid windowtext; border-bottom:1.0pt solid windowtext; border-left:medium none; background:#FFFFFF; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
			<b>Level&nbsp;3</b></p></td>
		</tr>
		<tr style='height:7.15pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:white;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.2pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Land</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>279,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>279,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.9pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Building</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>481,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>481,000&nbsp;</p>
			</td>
			<td valign=bottom style='background:#CBDBD1;
  padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1.0pt solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:6.45pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:medium none; border-left:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:1.1pt;
  '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='background:white;padding:
  1.1pt;'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-top:medium none; border-bottom:medium none; border-right:1.0pt solid windowtext; background:white; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr style='height:12.9pt'>
			<td valign=bottom style='border-right:medium none; border-top:medium none; border-bottom:1px solid #000000; border-left:1.0pt solid windowtext; background:#CBDBD1; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman"; margin-left:0in; margin-right:0in; margin-top:0in'>Total&nbsp;fixed&nbsp;assets</p>
			</td>
			<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1px solid windowtext; background:#CBDBD1; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>760,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1px solid windowtext; background:#CBDBD1; padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-left:medium none; border-right:medium none; border-top:medium none; border-bottom:1px solid windowtext; background:#CBDBD1; padding:1.1pt'>
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>760,000&nbsp;</p>
			</td>
			<td valign=bottom style='border-bottom:1px solid #000000; background:#CBDBD1; padding:1.1pt; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=bottom style='border-top:medium none;border-left:
  medium none;border-bottom:1px solid windowtext;border-right:1.0pt solid windowtext;
  background:#CBDBD1;padding:1.1pt'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>&nbsp;</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<b>NOTE 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; INTANGIBLE
ASSET IMPAIRMENT</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>In estimating
the fair value of the reporting units, we considered the three traditional
approaches to valuation, the market approach and the income (discounted cash
flow &#147;DCF&#148;) approach.&nbsp; The market approach compares the subject company with
guideline publicly-traded companies.&nbsp; Valuation multiples are calculated from
the selected companies to provide an indication of how much a current investor
in the marketplace would be willing to pay for a company with similar
characteristics.&nbsp; The income approach measures the projected cash flows
expected to be realized from the asset.&nbsp; The value of a business is the
expected cash flows discounted to a present value at a discount rate that
considers the degree of risk associated with the realization of the projected
monetary benefits.&nbsp; The cash flow analysis relies upon estimates of the
entity&#146;s future revenue and expenses to ultimately project the future cash
flows resulting from the business activity of each entity. An appropriate
discount rate is reached by calculating the weighted average cost of capital
&#147;WACC,&#148; which is determined by the assumptions underlying the Capital Asset
Pricing Model &#147;CAPM&#148; and is considered to reflect the view of &#147;Market
Participants,&#148; as required under ASC 825 (formerly SFAS 157). </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>The material
assumptions relied upon in the analyses used to value the Micro Motors and
Astromec reporting units and goodwill are shown below.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<u>Astromec</u></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Market
Approach </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(a)&nbsp;&nbsp;Nine public
companies were identified that had a range of revenue to value multiples of
between 0.19 times to a high of 1.02 times with a median revenue multiple of
0.43.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(b)&nbsp;&nbsp;Eleven similar open
market transactions were identified that had revenue to value multiples that
ranged from a low of 0.25 to a high of 0.77 with a median revenue multiple of
0.56 </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(c)&nbsp;&nbsp;The low
multiples were used to determine the fair value due to Astromec&#146;s small size
and profitability.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline; margin-right:0in; margin-top:0in'>-54-</p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income
Approach </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(a)&nbsp;A discounted
cash flow model was constructed using a ten &#150;year forecast for the reporting
unit to determine a debt-free cash flow forecast.&nbsp; The present value of the
cash flows and residual value were discounted to a present value using the WACC.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.75in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
inputs to the CAPM to determine the cost of equity used in the WACC were:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>i.&nbsp;&nbsp;&nbsp;Risk free rate of 3.74%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>ii.&nbsp; Relevered
Beta of 1.24</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>iii.&nbsp;Equity
risk premium of 5.18%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>iv.&nbsp;Small cap
stock premium of 6.28%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>v.&nbsp;&nbsp;Reporting
unit risk premium of 2.0%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.75in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
reporting unit&#146;s cost of equity was estimated to be 16.4%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(b)&nbsp;&nbsp; The cost of debt was
6.05% based on Moody&#146;s Baa seasoned bond rate. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:-0.25in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline; margin-right:0in; margin-top:0in'>(c)&nbsp;&nbsp;&nbsp;Based on the
debt/equity capital structure of the peer group of 83% equity and 17% debt, the WACC was estimated at 15.8%.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>
<u>Micro Motors</u></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Market
Approach </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(a)&nbsp;Ten public
companies were identified that had a range of revenue to value multiples of
between 0.20 times to a high of 1.00 times with a median revenue multiple of
0.47.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(b)&nbsp;Eleven similar open
market transactions were identified that had revenue to value multiples that
ranged from a low of 0.25 to a high of 0.77 with a median revenue multiple of
0.56</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(c)&nbsp;The mean
multiples were used to determine the fair value due to Micro Motor&#146;s size.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.0in;text-align:justify;punctuation-wrap:
simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income
Approach </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(a)&nbsp;A discounted
cash flow model was constructed using a ten&#150;year forecast for the reporting
unit to determine a debt-free cash flow forecast.&nbsp; The present value of the
cash flows and residual value were discounted to a present value using the WACC.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.75in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
inputs to the CAPM to determine the cost of equity used in the WACC were:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>i.&nbsp;&nbsp;&nbsp;&nbsp;Risk free rate of 3.74%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>ii.&nbsp;&nbsp; Relevered
Beta of 0.85</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>iii.&nbsp;&nbsp;Equity
risk premium of 5.18%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:2.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>iv.&nbsp; Small cap
stock premium of 6.28%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:1.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.75in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
reporting unit&#146;s cost of equity was estimated to be 14.4%</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:.5in;text-align:justify;text-indent:.5in;
punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-align:justify;text-indent:
- -.25in;punctuation-wrap:simple;text-autospace:none;vertical-align:baseline'>(b)&nbsp;The cost of debt was
6.05% based on Moody&#146;s Baa seasoned bond rate. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:1.25in;text-indent:-.25in'>(c)&nbsp;Based on the debt/equity capital structure of the peer group of
83% equity and 17% debt, the WACC was estimated at 12.5%.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:24.5pt'>As the fair
value of the equity was below the carrying value of the equity at both Astromec
and Micro Motors, the goodwill was considered impaired and a step 2 analysis
was required.&nbsp; In the step two analysis, it was determined that all the
remaining goodwill for these two reporting units was impaired.&nbsp; Goodwill
impairment associated with Astromec recognized as an operating expense was
$1,887,000. Goodwill impairment associated with Micro Motors recognized as an
operating expense was $1,110,000. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>-55-</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-indent:.5in'>&nbsp;</p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>
<b>NOTE 11. SUBSEQUENT EVENTS</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>We have evaluated events or transactions that occurred after
the balance sheet date of June 30, 2010 through September 24, 2010. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On July 7, 2010 The Nasdaq Stock Market notified
the Company that it had regained compliance with the minimum $1.00 per share bid price requirement for continued listing, and
further, that it complies with all other applicable standards for continued
listing on The Nasdaq Stock Market. &nbsp;Accordingly, the Company continues to
be listed on The NASDAQ Stock Market.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On July 14, 2010, the Board of
Directors (the &quot;Board&quot;) of Pro-Dex, Inc. (the &quot;Company&quot;)
acting in executive session and upon recommendation of the Company's
Compensation Committee, approved: </p>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>A Long-Term Incentive Plan (the
&quot;LTIP&quot;) to provide equity-based incentive opportunities for the
Company's executives and other key personnel. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>An Annual Incentive Plan (the &quot;AIP&quot;)
to provide annual cash-based incentive opportunities for the Company's key
employees. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>A new compensation plan for non-employee
directors of the Board, effective as of July 1, 2010 </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On July 14, 2010, the Company and
Mark P. Murphy, the Chief Executive Officer of the Company, entered into an
at-will employment arrangement (&quot;Employment Arrangement&quot;). &nbsp;Under the
terms of the Employment Arrangement, Mr. Murphy will report to the Board and a
summary of his compensation will consist of the following components: </p>
<ul>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;text-autospace:none; margin-right:0in; margin-top:0in'>A base salary at an annualized rate of
$300,000.</p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;text-autospace:none; margin-right:0in; margin-top:0in'>An initial grant of 50,000 stock
options.</p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;text-autospace:none; margin-right:0in; margin-top:0in'>Participation in all Company incentive
compensation plans open to senior executives of the Company.</p></li>
	<li>
	<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0.25in;text-align:justify;text-autospace:none; margin-right:0in; margin-top:0in'>If Mr. Murphy's employment with the
Company terminates for any reason, the Company shall pay one year of severance
compensation equal to one (1.0) times his then-current annual base salary, plus
(ii) any AIP or LTIP awards earned but not yet paid as of the termination date.</p>
	</li>
</ul>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The contingent liability for the value
of expired options awarded to the Company&#146;s former Executive Vice President and
Chief Business Development Officer, Patrick Johnson, expired on August 7, 2010.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On
September 16, 2010, we paid the remaining $1,519,000 balance due on the Union
Bank mortgage, fully retiring such indebtedness.&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-indent:.5in;text-autospace:none'>&nbsp;</p>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 56- -</p>
			</td>
		</tr>
	</table></div><font face="Times New Roman"><br clear=ALL></font>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<b>Index to Exhibits</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<table class=MsoNormalTable border=0 cellpadding=0 width=726
 style='width:100%;border-collapse:collapse'>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<b>Exhibit
  No. </b></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<b>Document
  </b></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">&nbsp;</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">3.1</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Articles
  of Incorporation (incorporated herein by reference to Exhibit 3.1 to the
  Company&#146;s Form 8-K filed April 23, 2007). </font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">3.2</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Articles
  of Amendment to Articles of Incorporation (incorporated herein by reference
  to Exhibit 3.1 to the Company&#146;s Form 8-K filed December 5, 2007).</font></p>
		</td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">3.3</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Articles
  of Amendment to Articles of Incorporation (incorporated herein by reference
  to Exhibit 3.1 to the Company&#146;s Form 8-K filed June 18, 2010).</font></p>
		</td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">3.4</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Amended
  and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to the
  Company&#146;s Form 8-K filed December 5, 2007). </font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">3.5</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Amendment
  to Amended and Restated Bylaws (incorporated herein by reference to Exhibit
  3.1 to the Company&#146;s Form 8-K filed February 10, 2009).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.1*</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">1994
  Employees Stock Option Plan, as amended (incorporated herein by reference to
  Exhibit 10.22 to the Company&#146;s Registration Statement on Form S-4 filed April
  13, 1994).&nbsp;&nbsp; </font></p></td>
	</tr>
	<tr style='height:30.15pt'>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.2*<sup>&nbsp; </sup></font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">1994
  Directors Stock Option Plan as amended (incorporated herein by reference to
  Exhibit 10.22 to the Company&#146;s Registration Statement on Form S-4 filed April
  13, 1994).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.3*</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">First
  Amended and Restated 2004 Stock Option Plan (incorporated herein by reference
  to Exhibit 4.0 to the Company&#146;s Form S-8 filed March 9, 2007).</font></p>
		</td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.4*</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">2004
  Directors Stock Option Plan (incorporated herein by reference to Exhibit 4.2
  to the Company&#146;s Form S-8 filed January 23, 2004).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.5</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Asset
  Purchase Agreement, dated October 31, 2005 between IntraVantage, Inc.
  (incorporated herein by reference to Exhibit 10.1 to the Company&#146;s Form 8-K
  filed November 2, 2005).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.6</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Exclusive
  License Agreement, dated October 31, 2005, between Pro-Dex, Inc. and
  IntraVantage, Inc. (incorporated herein by reference to Exhibit 10.2 to the
  Company&#146;s Form 8-K filed November 2, 2005).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.7&nbsp; </font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">&nbsp;</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Royalty
  Agreement, dated October 31, 2005, between Pro-Dex, Inc. and IntraVantage,
  Inc. (incorporated herein by reference to Exhibit&nbsp; 10.3 to the Company&#146;s Form
  8-K filed November 2, 2005).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.8</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Asset
  Purchase Agreement, dated January 5, 2006 between Pro-Dex, Astromec, Inc.,
  Astromec, Inc., M.D. Glover, Inc., Malcolm D. Glover, Jr., and Malcolm D.
  Glover, Sr. (incorporated herein by reference to Exhibit 10.1 to the
  Company&#146;s Form 8-K filed January 6, 2006).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.9</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Purchase
  and Sale Agreement and Escrow Instructions, dated January 3, 2006, between
  Pro-Dex, Inc. and M.D. Glover, Inc. (incorporated herein by reference to
  Exhibit 10.2 to the Company&#146;s Form 8-K filed January 6, 2006).</font></p>
		</td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.10</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Promissory
  Note, dated March 4, 2006, effective March 30, 2006, by Pro-Dex, Inc. in
  favor of Union Bank, National Association&nbsp; (incorporated herein by reference
  to Exhibit 10.1 to the Company&#146;s Form 8-K filed April 3, 2006).</font></p>
		</td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.11</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Loan
  Agreement, dated March 4, 2006, effective March 30, 2006, by Pro-Dex, Inc. in
  favor of Union Bank, National Association (incorporated herein by reference
  to Exhibit 10.2 to the Company&#146;s Form 8-K filed April 3, 2006).</font></p>
		</td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.12</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Credit
  Agreement, dated November 1, 2007, between Pro-Dex, Inc. and Wells Fargo
  Bank, N.A. (incorporated herein by reference to Exhibit 10.1 to the Company&#146;s
  Form 8-K filed November 20, 2007).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.13</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">First
  Amendment to Credit Agreement, dated November 17, 2008, between Pro-Dex, Inc.
  and Wells Fargo Bank, N.A. (incorporated
  herein by reference to Exhibit 10.3 to the Company&#146;s Form 8-K filed January
  13, 2009).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.14</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Term
  Note in favor of Wells Fargo Bank, N.A. dated November 17, 2008 (incorporated herein by reference to Exhibit 10.1 to the
  Company&#146;s Form 8-K filed January 13, 2009).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.15</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Forbearance
  Letter, dated May 12, 2009, between Pro-Dex, Inc. and Wells Fargo Bank, N.A.
  (incorporated herein by reference to Exhibit 10.1 to the Company&#146;s Form 10-Q
  filed May 14, 2009).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.16</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Third
  Amendment to Credit Agreement, dated June
  22, 2009, between Pro-Dex, Inc. and Wells Fargo Bank, N.A. (incorporated
  herein by reference to Exhibit 10.1 to the Company&#146;s Form 8-K filed July 6,
  2009).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.17</font></p></td>
		<td valign=top style='padding:0in; height:15pt'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Fourth
  Amendment to Credit Agreement, dated June 30, 2009, between Pro-Dex, Inc. and
  Wells Fargo Bank, N.A. (incorporated herein by reference to Exhibit 10.2 to the
  Company&#146;s Form 8-K filed July 6, 2009.</font></p></td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p align="center"><font face="Times New Roman"><br clear=ALL>-57-</font></p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<table class=MsoNormalTable border=0 cellpadding=0 width=726
 style='width:100%;border-collapse:collapse' id="table14">
	<tr>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.18</font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Revolving
  Line of Credit Note and Fifth Amendment to Credit Agreement, dated November
  1, 2009, with Wells Fargo Bank, N.A. (incorporated herein by reference to Exhibit
  10.1 to Form 10-Q filed October 29, 2009).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.19*<sup> </sup></font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Employment
  Agreement with Mark Murphy dated July 14, 2010 (incorporated herein by
  reference to Exhibit 10.4 to the Company&#146;s Form 8-K filed July 16, 2010).</font></p>
		</td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.20<sup> </sup></font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Lease
  agreement with Irvine Business Properties, dated August 3, 2007 (incorporated
  herein by reference to Exhibit 10.1 to the Company&#146;s Form 8-K filed August
  23, 2007).</font></p></td>
	</tr>
	<tr style='height:35.1pt'>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">10.21*</font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Severance
  Agreement between Jeffrey J. Ritchey and Pro-Dex, Inc. dated January 7, 2008
  (incorporated herein by reference to Exhibit 10.2 to the Company&#146;s Form 8-K
  filed January 9, 2008).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">21.1<sup> </sup></font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">List
  of Subsidiaries (incorporated herein by reference to Exhibit 21.1 to the
  Company&#146;s Form 10-KSB filed September 28, 2007).</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">23.1<sup> xx</sup></font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Consent
  Letter of Moss Adams LLP.</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">31.1<sup> xx</sup></font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Certification
  of the Chief Executive Officer Required by Rule 13a-14(a) of the Securities
  Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the
  Sarbanes-Oxley Act of 2002. </font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">31.2<sup> xx</sup></font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Certification
  of the Chief Financial Officer Required by Rule 13a-14(a) of the Securities
  Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the
  Sarbanes-Oxley Act of 2002.</font></p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; height:15pt' align="center" nowrap>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
		<font style="font-size: 11.0pt">32<sup> xx</sup></font></p></td>
		<td valign=top style='padding:0in; height:15pt' width="1330">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 11.0pt">Certification
  of the Chief Executive Officer and Chief Financial Officer Pursuant to 18
  U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002.</font></p></td>
	</tr>
</table>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 11.0pt">*
Denotes management contract or compensatory arrangement required to be filed as
an exhibit to the Form 10-K. </font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<sup>xx</sup> <font style="font-size: 11.0pt">Filed
  Herewith</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<p align="center"><font face="Times New Roman">-58-</font></p>
<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
	<hr size=2 width="100%" noshade color=navy align=center></div>
<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<font face="Times New Roman"><br clear=all
style='page-break-before:always'></font>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>SIGNATURES
</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized. </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="50%">
	<tr>
		<td width=305 valign=top style='width:229.1pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>PRO-DEX INC.
		</p></td>
		<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=305 valign=top style='width:229.1pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">/
  s / Mark P. Murphy&nbsp;</font></p></td>
		<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=305 valign=top style='width:229.1pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">---------------------------------&nbsp;
  		</font></p></td>
		<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=305 valign=top style='width:229.1pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Mark
  P. Murphy&nbsp;</font></p></td>
		<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=305 valign=top style='width:229.1pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">President,
  Chief Executive Officer and Director</font></p></td>
		<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=305 valign=top style='width:229.1pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">(Principal
  Executive Officer)</font></p></td>
		<td width=1 valign=top style='width:1.0pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p></td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.5in;text-autospace:
none'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-autospace:none'>In accordance
with the Exchange Act, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.</p>
<table class=MsoNormalTable border=0 cellpadding=0 width=744
 style='width:100%;border-collapse:collapse'>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">/
  s / Mark P. Murphy&nbsp;</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">September
  28, 2010</font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">---------------------------------&nbsp;
  		</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;------------------------------------
  		</font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Mark
  P. Murphy&nbsp;</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Date
  </font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">President,
  Chief Executive Officer and Director</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
		<td style='border:none;padding:0in 0in 0in 0in' width=24>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">(Principal
  Executive Officer)</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
		<td style='border:none;padding:0in 0in 0in 0in' width=24>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;&nbsp;
		</p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;&nbsp;
		</p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
		</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">/
  s / Jeffrey J. Ritchey&nbsp; </font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">September
  28, 2010</font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">---------------------------------&nbsp;
  		</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;-------------------------------------
  		</font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Jeffrey
  J. Ritchey&nbsp;</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Date
  </font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Treasurer,
  Chief Financial Officer &amp; Secretary</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
		<td style='border:none;padding:0in 0in 0in 0in' width=24>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">(Principal
  Financial and Accounting Officer) </font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
		<td style='border:none;padding:0in 0in 0in 0in' width=24>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;&nbsp;
		</p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;&nbsp;
		</p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
		</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">/
  s / George J. Isaac&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">---------------------------------&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">George
  J. Isaac&nbsp;</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">September
  28, 2010</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">----------------------------------------</font></p>
		</td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Director</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Date
  </font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">/
  s / William L. Healey&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">---------------------------------&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">William
  L. Healey&nbsp;</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">September
  28, 2010</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">----------------------------------------</font></p>
		</td>
		<td style='border:none;padding:0in 0in 0in 0in' width=24>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Director</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Date
  </font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
		</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">/
  s / Michael J. Berthelot&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">---------------------------------&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Michael
  J. Berthelot&nbsp; </font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">September
  28, 2010</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">----------------------------------------</font></p>
		</td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Director</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Date
  </font></p></td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">/
  s / David Holder&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">---------------------------------&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">David
  Holder&nbsp; </font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">&nbsp;</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">September
  28, 2010</font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">----------------------------------------</font></p>
		</td>
		<td width=24 valign=top style='width:.25in;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 8.5pt">&nbsp;</font></p></td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Director</font></p></td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
		<font style="font-size: 10.0pt">Date
  </font></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>
		</td>
		<td style='border:none;padding:0in 0in 0in 0in' width=24>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</td>
	</tr>
	<tr>
		<td width=346 valign=top style='width:259.75pt;padding:0in 0in 0in 0in'>
		&nbsp;<p>&nbsp; </td>
		<td width=374 valign=top style='width:280.3pt;padding:0in 0in 0in 0in'>
		&nbsp;</td>
		<td style='border:none;padding:0in 0in 0in 0in' width=24>
		&nbsp;</td>
	</tr>
</table>
<div>
	<table cellspacing=0 cellpadding=0 hspace=0 vspace=0 align=center>
		<tr>
			<td valign=top align=left style='padding-top:0in;padding-right:0in;
  padding-bottom:0in;padding-left:0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>- 59 -</p>
			</td>
		</tr>
	</table></div>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>
<font style="font-size: 10.0pt">&nbsp;</font></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center;text-autospace:none'>
<b><font style="font-size: 16.0pt">End of Filing</font></b></p>
<div>&nbsp;</div>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>2
<FILENAME>ex23-1.htm
<TEXT>
<html>

<head>

<title>EXHIBIT 23.1</title>
</head>

<body>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";text-align:left'><b>&nbsp;EXHIBIT 23.1</b></p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";text-align:left'><b>&nbsp;</b></p>

<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><b>Consent of Independent Registered Public
Accounting Firm</b></p>

<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>

<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt;text-align:justify; margin-left:0in; margin-right:0in; margin-top:0in'>We consent to the incorporation by reference
in the Registration Statements (Form S-8 Nos. 333-112133, 333-141178)
pertaining to the Pro-Dex, Inc. 2004 Stock Option Plan and the Pro-Dex, Inc.
2004 Directors' Stock Option Plan, Inc., of our report dated September 28, 2010 with
respect to the consolidated financial statements of Pro-Dex, Inc. and
Subsidiaries included in this Annual Report (Form 10-K) for the year ended June
30, 2010.</p>

<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>

<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>

<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Arial Unicode MS";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>

<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>Irvine, California</p>

<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>September
28, 2010</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>ex31-1.htm
<TEXT>
<html>

<head>
<title>EXHIBIT 31.1</title>
</head>

<body>


<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";'><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EXHIBIT 31.1</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><font style="font-size: 10.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><font style="font-size: 10.0pt">I, Mark P. Murphy, certify
that:</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><font style="font-size: 10.0pt">&nbsp;</font></p>

<table border="0" style="border-collapse: collapse" width="100%" id="table1">
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">1.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">I have reviewed this Form 10-K of
Pro-Dex, Inc.;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">2.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Based on my knowledge, this annual
report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by this report; </font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">3.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Based on my knowledge, the financial
statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the small business issuer as of, and for, the periods
presented in this report; </font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">4.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">The registrant&#146;s other certifying officer(s) and I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f)) for the small business issuer and have:</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">a)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating
to the small business issuer , including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this report is being prepared;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">b)</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Designed such internal control
over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally
accepted accounting principles;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">c)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Evaluated the
effectiveness of the small business issuer&#146;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">d)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Disclosed in this report
any change in the small business issuer&#146;s internal control over financial
reporting that occurred during the small business issuer&#146;s&nbsp; most recent fiscal
quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant&#146;s internal control over financial reporting;&nbsp; and</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">5.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the small business issuer&#146;s auditors
and the audit committee of small business issuer&#146;s board of directors (or
persons performing the equivalent functions):</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">a)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">all significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting which are reasonably likely to adversely
affect the small business issuer&#146;s&nbsp; ability to record, process, summarize and
report financial information; and </font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">b)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">any fraud, whether or not
material, that involves management or other employees who have a significant
role in the small business issuer&#146;s internal control over financial reporting.</font></p>

		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">&nbsp;</font></p>

<table border="0" style="border-collapse: collapse" width="100%" id="table2">
	<tr>
		<td><font style="font-size: 10.0pt">Date: September 28,
2010</font></td>
		<td width="50%">

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>

		</td>
	</tr>
	<tr>
		<td width="50%">&nbsp;</td>
		<td width="50%">

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><u>/s/
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; MARK P. MURPHY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
		</td>
	</tr>
	<tr>
		<td width="50%">&nbsp;</td>
		<td width="50%">

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">Mark
P. Murphy</font></p></td>
	</tr>
	<tr>
		<td width="50%">&nbsp;</td>
		<td width="50%">

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">Chief
Executive Officer</font></p></td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>ex31-2.htm
<TEXT>
<html>

<head>
<title>EXHIBIT 31.2</title>
</head>

<body>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><b>EXHIBIT 31.2</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><b>&nbsp;</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><font style="font-size: 10.0pt">I, Jeffrey J. Ritchey,
certify that: </font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><font style="font-size: 10.0pt">&nbsp;</font></p>

<table border="0" style="border-collapse: collapse" width="100%" id="table1">
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">1.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">I have reviewed this Form 10-K of
Pro-Dex, Inc.;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">2.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Based on my knowledge, this annual
report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by this report; </font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">3.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Based on my knowledge, the financial
statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the small business issuer as of, and for, the periods
presented in this report; </font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">4.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">The registrant&#146;s other certifying officer(s) and I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f)) for the small business issuer and have:</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">a)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating
to the small business issuer , including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this report is being prepared;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">b)</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Designed such internal control
over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally
accepted accounting principles;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">c)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Evaluated the
effectiveness of the small business issuer&#146;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">d)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">Disclosed in this report
any change in the small business issuer&#146;s internal control over financial
reporting that occurred during the small business issuer&#146;s&nbsp; most recent fiscal
quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant&#146;s internal control over financial reporting;&nbsp; and</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify"><font style="font-size: 10.0pt">5.</font></td>
		<td width="1337" colspan="2" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the small business issuer&#146;s auditors
and the audit committee of small business issuer&#146;s board of directors (or
persons performing the equivalent functions):</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">a)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">all significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting which are reasonably likely to adversely
affect the small business issuer&#146;s&nbsp; ability to record, process, summarize and
report financial information; and </font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify">&nbsp;</td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'><font style="font-size: 10.0pt">&nbsp;</font></p>

		</td>
	</tr>
	<tr>
		<td valign="top">
		<p align="justify">&nbsp;</td>
		<td width="46" valign="top">
		<p align="justify"><font style="font-size: 10.0pt">b)</font></td>
		<td width="1291" valign="top">

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;margin-top:0in'>
<font style="font-size: 10.0pt">any fraud, whether or not
material, that involves management or other employees who have a significant
role in the small business issuer&#146;s internal control over financial reporting.</font></p>

		</td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<table border="0" style="border-collapse: collapse" width="100%" id="table2" cellpadding="0">
	<tr>
		<td width="50%"><font style="font-size: 10.0pt">Date: September 28,
2010</font></td>
		<td width="50%">
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>

		</td>
	</tr>
	<tr>
		<td width="50%">&nbsp;</td>
		<td width="50%">

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'><u>/s/
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JEFFREY J. RITCHEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u><font style="font-size: 10.0pt"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
		</td>
	</tr>
	<tr>
		<td width="50%">&nbsp;</td>
		<td width="50%">

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">Jeffrey
J. Ritchey</font></p>

		</td>
	</tr>
	<tr>
		<td width="50%">&nbsp;</td>
		<td width="50%">

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
<font style="font-size: 10.0pt">Chief
Financial Officer</font></p>

		</td>
	</tr>
</table>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'><font style="font-size: 10.0pt">&nbsp;</font></p>

<p style="font-size: 12.0pt; font-family: Times New Roman; text-autospace: none; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">&nbsp;</p>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<FILENAME>ex32.htm
<TEXT>
<html>

<head>

<title>EXHIBIT 32</title>
</head>

<body>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-autospace:none'>&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-family:"Times New Roman"'><b>EXHIBIT 32</b></p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;margin-bottom:0in;
margin-left:3.0in;margin-bottom:.0001pt;text-indent:-3.0in'>&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-size:11.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:0in;
margin-bottom:0in;margin-left:3.0in;margin-bottom:.0001pt;text-align:center;
text-indent:-3.0in'>&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-family:"Times New Roman";margin-top:0in;text-align:center'><b>CERTIFICATIONS
OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER</b></p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-family:"Times New Roman";margin-top:0in;text-align:center'><b>PURSUANT
TO 18 U.S.C. SECTION 1350, <br>
AS ADOPTED PURSUANT TO <br>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</b></p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-family:"Times New Roman";margin-top:0in;text-align:center'><b>&nbsp;</b></p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:justify;font-family:"Times New Roman";margin-top:0in;text-align:center'><b>Certifications
of Chief Executive Officer and Chief Financial Officer</b></p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-size:11.0pt;font-family:"Times New Roman";'>&nbsp;</p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-family:"Times New Roman";margin-top:0in;text-align:justify'>In connection with the
annual report on Form 10-K of Pro-Dex Inc. (the &#147;Company&#148;) for the annual
period ended June 30, 2010 (the &#147;Report&#148;), the undersigned hereby certify in
their capacities as Chief Executive Officer and Chief Financial Officer of the
Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:</p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-family:"Times New Roman";text-align:justify'>1.&nbsp;&nbsp; The Report fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended; and</p>

<p style='margin-top:12.0pt;margin-right:0in;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-indent:.5in;font-family:"Times New Roman";text-align:justify'>2.&nbsp;&nbsp; The information contained in the
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Courier New";text-align:justify'>&nbsp;</p>

<table border="0" style="border-collapse: collapse" width="100%" id="table1">
	<tr>
		<td width="45%">Dated: September 28, 2010 </td>
		<td width="55%">

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>By:<u>
/s/&nbsp;&nbsp;&nbsp;
MARK P. MURPHY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>

		</td>
	</tr>
	<tr>
		<td width="45%">&nbsp;</td>
		<td width="55%">

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mark
P. Murphy</p>

		</td>
	</tr>
	<tr>
		<td width="45%">&nbsp;</td>
		<td width="55%">

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief
Executive Officer and President<u><br>
</u></p>

		</td>
	</tr>
	<tr>
		<td width="45%">&nbsp;</td>
		<td width="55%">

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Courier New";text-align:justify'>&nbsp;</p>

		</td>
	</tr>
	<tr>
		<td width="45%">Dated: September 28, 2010</td>
		<td width="55%">

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>By:<u>
/s/ &nbsp;&nbsp;JEFFREY J. RITCHEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>

		</td>
	</tr>
	<tr>
		<td width="45%">&nbsp;</td>
		<td width="55%">

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jeffrey
J. Ritchey</p>

		</td>
	</tr>
	<tr>
		<td width="45%">&nbsp;</td>
		<td width="55%">

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief Financial Officer</p>

		</td>
	</tr>
</table>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Courier New";'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify'>A signed original of this written
statement required by Section 906, or other document authenticating,
acknowledging, or otherwise adopting the signatures that appear in typed form
within the electronic version of this written statement required by Section
906, has been provided to the Company and will be retained by the Company and
Furnished to the Securities and Exchange Commission or its staff upon request.</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp; </p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>

</body>

</html>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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