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<SEC-DOCUMENT>0001047469-09-009240.txt : 20091028
<SEC-HEADER>0001047469-09-009240.hdr.sgml : 20091028
<ACCEPTANCE-DATETIME>20091028163330
ACCESSION NUMBER:		0001047469-09-009240
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20091124
FILED AS OF DATE:		20091028
DATE AS OF CHANGE:		20091028
EFFECTIVENESS DATE:		20091028

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PRECISION OPTICS CORPORATION INC
		CENTRAL INDEX KEY:			0000867840
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				042795294
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-10647
		FILM NUMBER:		091142080

	BUSINESS ADDRESS:	
		STREET 1:		22 EAST BROADWAY
		CITY:			GARDNER
		STATE:			MA
		ZIP:			01440-3338
		BUSINESS PHONE:		9786301800

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PRECISION OPTICS CORP INC
		DATE OF NAME CHANGE:	19600201
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> SCHEDULE 14A INFORMATION</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Proxy
Statement Pursuant to Section 14(a) of<BR>
the Securities Exchange Act of 1934 </FONT></P>
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<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2> Filed by the Registrant <FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
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Check the appropriate box:</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Preliminary Proxy Statement</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2>Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Definitive Proxy Statement</FONT></TD>
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<TD style="font-family:times;"><BR><FONT SIZE=2>Definitive Additional Materials</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Soliciting Material Pursuant to &sect;240.14a-12<BR></FONT>
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<TD COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> Precision Optics Corporation,&nbsp;Inc.</B></FONT></TD>
</TR>
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<TD COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> (Name of Registrant as Specified In Its Charter)</FONT></TD>
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<TD COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2><B> Not applicable.</B></FONT></TD>
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</FONT> <FONT SIZE=2> (Name of Person(s) Filing Proxy Statement, if other than the Registrant)</FONT></TD>
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<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2><BR>
Payment of Filing Fee (Check the appropriate box):</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2> <FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>No fee required.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2> <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and&nbsp;0-11.</FONT></TD>
</TR>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>(1)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>Title of each class of securities to which transaction applies:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>(2)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>Aggregate number of securities to which transaction applies:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>(3)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>(4)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>Proposed maximum aggregate value of transaction:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>(5)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>Total fee paid:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT SIZE=2> <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Fee paid previously with preliminary materials.</FONT></TD>
</TR>
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<TD style="font-family:times;"><BR><FONT SIZE=2> <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>(1)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><BR><FONT SIZE=2>Amount Previously Paid:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
</TR>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>(2)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>Form, Schedule or Registration Statement No.:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>(3)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>Filing Party:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>(4)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2>Date Filed:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;</TD>
</TR>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> PRECISION OPTICS CORPORATION,&nbsp;INC.<BR>
22 East Broadway<BR>
Gardner, Massachusetts 01440  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Dear
Stockholder: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>You
are cordially invited to attend the 2009 Annual Meeting of Stockholders of Precision Optics Corporation,&nbsp;Inc. The meeting will be held Tuesday, November&nbsp;24, 2009, at
10:00&nbsp;a.m. at The Colonial Hotel, 625 Betty Spring Road, Gardner, Massachusetts 01440. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Whether
or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. After reading the Proxy Statement, please promptly vote and submit your
proxy by dating, signing and returning the enclosed proxy card in the enclosed envelope. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
have also enclosed a copy of our 2009 Annual Report to Stockholders. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on November&nbsp;24, 2009&nbsp;&#151; Precision Optics
Corporation,&nbsp;Inc.'s Proxy Statement and 2009 Annual Report to Stockholders are available at www.materials.proxyvote.com/740294.</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Board of Directors and Management look forward to seeing you at the meeting. </FONT></P>
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<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>Very truly yours,</FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2><B>
<IMG SRC="g9167.jpg" ALT="GRAPHIC" WIDTH="97" HEIGHT="51">
 </B></FONT></TD>
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<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>Richard E. Forkey<BR></FONT> <FONT SIZE=2><I>President</I></FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> PRECISION OPTICS CORPORATION,&nbsp;INC.<BR>
22 East Broadway<BR>
Gardner, Massachusetts 01440  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="be74501_notice_of_2009_annual_meeting_of_stockholders"> </A>
<A NAME="toc_be74501_1"> </A></FONT> <FONT SIZE=2><B>  NOTICE OF&nbsp;2009 ANNUAL MEETING OF STOCKHOLDERS    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> To be Held on Tuesday, November&nbsp;24, 2009  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>To
our Stockholders: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Precision
Optics Corporation,&nbsp;Inc. will hold its 2009 Annual Meeting of Stockholders on Tuesday, November&nbsp;24, 2009, at 10:00&nbsp;a.m. at The Colonial Hotel, 625 Betty Spring Road,
Gardner, Massachusetts 01440. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
are holding this Annual Meeting to: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>elect
one Class&nbsp;I director to hold office for a three-year term and until his respective successor shall have been duly elected and
qualified; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>transact
such other business as may properly come before the Annual Meeting and any adjournments or postponements of the Annual Meeting. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>All
stockholders of record at the close of business on Thursday, October&nbsp;1, 2009, are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements of the Annual
Meeting. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on November&nbsp;24, 2009&nbsp;&#151; Precision Optics
Corporation,&nbsp;Inc.'s Proxy Statement and 2009 Annual Report to Stockholders are available at www. materials.proxyvote.com/740294.</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>It is important that your shares be represented at this meeting. Even if you attend the meeting, we hope that you will promptly vote and submit your proxy by dating, signing
and returning the enclosed proxy card. This will not limit your right to attend the meeting.</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>By
Order of the Board of Directors </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>
<IMG SRC="g770793.jpg" ALT="GRAPHIC" WIDTH="210" HEIGHT="54">
  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Jack
P. Dreimiller<BR></FONT> <FONT SIZE=2><I>Clerk</I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Gardner,
MA<BR>
October&nbsp;30, 2009 </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY. A RETURN ENVELOPE THAT REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES IS ENCLOSED FOR THAT PURPOSE.</B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> PRECISION OPTICS CORPORATION,&nbsp;INC.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I>


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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> Annual Meeting of Stockholders<BR>
November&nbsp;24, 2009  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da74501_proxy_statement"> </A>
<A NAME="toc_da74501_1"> </A></FONT> <FONT SIZE=2><B>  PROXY STATEMENT    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="da74501_information_concerning_solicitation_and_voting"> </A>
<A NAME="toc_da74501_2"> </A>
<BR></FONT><FONT SIZE=2><B>  INFORMATION CONCERNING SOLICITATION AND VOTING    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> General  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>This Proxy Statement and form of proxy are furnished in connection with the solicitation of proxies by the Board of Directors of Precision Optics
Corporation,&nbsp;Inc., a Massachusetts corporation (the "Company"), for use at the 2009 Annual Meeting of Stockholders of the Company to be held on November&nbsp;24, 2009, at 10:00&nbsp;a.m. at
The Colonial Hotel, 625 Betty Spring Road, Gardner, Massachusetts 01440, and any adjournments or postponements of the Annual Meeting, for the purposes set forth herein and in the accompanying Notice
of 2009 Annual Meeting of Stockholders. The Company incorporated in 1982, and its principal executive offices are located at 22 East Broadway, Gardner, Massachusetts 01440 (telephone
978-630-1800). This Proxy Statement and form of proxy are first being distributed to stockholders on or about October&nbsp;30, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Stockholders Entitled to Vote  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As of October&nbsp;1, 2009, the Company had outstanding 1,018,411 shares of common stock, $0.01 par value per share. Each share of common stock
entitles the holder of record thereof at the close of business on October&nbsp;1, 2009 (the "Record Date") to one vote, in person or by proxy, on the matters to be voted upon at the meeting. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Voting Procedures  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Consistent with Massachusetts law and the Company's By-laws, the holders of a majority of the shares entitled to be cast on a particular
matter, present in person or represented by proxy, constitutes a quorum as to such matter. Votes cast by proxy or in person at the Annual Meeting will be counted by persons appointed by the Company to
act as election inspectors for the meeting. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
the enclosed form of proxy is properly signed and returned and not revoked, the shares represented thereby will be voted at the Annual Meeting. If the stockholder specifies in the proxy how the
shares are to be voted, they will be voted as specified. If the stockholder does not specify how the shares are to be voted, such shares will be voted in favor of and for the election of the nominee
for director as set forth in Proposal 1. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Any
stockholder has the right to revoke his or her proxy at any time before it is voted by: (1)&nbsp;attending the meeting and voting in person; (2)&nbsp;filing with the Clerk of the Company a
written instrument revoking the proxy; or (3)&nbsp;delivering to the Clerk another newly executed proxy bearing a later date. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Required Vote  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>With regard to the election of directors, votes may be cast "FOR" or "WITHHOLD." Provided that a quorum is present, the affirmative vote by the
holders of a plurality of the shares of common stock present </FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>and
voting at the Annual Meeting is required to elect the Class&nbsp;I director nominee described in Proposal 1. For purposes of this vote, abstentions and broker "non-votes" are counted
as present and entitled to vote for purposes of determining a quorum. A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power for the particular item and has not received instructions from the beneficial owner. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Voting on Other Matters  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>At the date hereof, the Company has no knowledge of any business other than that described in the Notice for the Annual Meeting which will be
presented for consideration at the Annual Meeting. If any other business should come before such meeting, the persons appointed by the enclosed form of proxy may, in their discretion, vote all such
proxies in accordance with their own judgment. The persons appointed by the enclosed form of proxy also may, in their discretion, vote all proxies with respect to matters incident to the conduct of
the meeting. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Costs of Proxy Solicitation  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Company will bear all the costs of the solicitation of proxies. The Board of Directors may arrange with brokerage houses and other custodians,
nominees, and fiduciaries to forward solicitation materials to the beneficial owners of the stock held of record by such persons, and the Company may reimburse them for the reasonable
out-of-pocket expenses incurred in so doing. In addition to the solicitation of proxies by use of the mail, the Company may use the services of some of its directors, officers,
and regular employees (who will receive no compensation therefrom in addition to their regular salaries) to solicit proxies personally or by mail or telephone. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>2</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_dc74501_1"> </A>
<BR></FONT><FONT SIZE=2><B>  PROPOSAL 1: ELECTION OF DIRECTOR    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>TO
CONSIDER AND APPROVE THE RE-ELECTION OF RICHARD E. FORKEY TO OUR BOARD OF DIRECTORS. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our
Board of Directors is divided into three classes that are as nearly equal in number as possible, with staggered terms of office. Only one class is elected each year. Each director serves a three
year term and until his or her successor has been duly elected and qualified. The Board of Directors has fixed the number of directors at six. The directors in Class&nbsp;III, Joseph N. Forkey and
Richard Miles, will hold office until the annual meeting of stockholders in 2011 and until their successors have been duly elected and qualified. The Class&nbsp;II directors, Joel R. Pitlor and
Donald A. Major, will hold office until the annual meeting of stockholders in 2010 and until their respective successors have been duly elected and qualified. The director in Class&nbsp;I, Richard
E. Forkey, will hold office until the annual meeting of stockholders in 2009 and is standing for re-election. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
names, ages, business experience for at least the last five years, and certain other information regarding the current directors, are as follows: </FONT></P>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Age</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Director<BR>
Since</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Principal Occupation; Directorships of Other Public Companies</B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Richard E. Forkey<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>69</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>1982</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>President, Chief Executive Officer, Treasurer and a director of our Company since founding our Company in 1982; Clerk of our Company from May 1983 to June&nbsp;1990.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Joseph N. Forkey<SUP>(1)(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>41</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2006</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Executive Vice President and Chief Scientific Officer of our Company since April 2006; Chief Scientist of our Company from
September 2003 to April 2006. Prior to joining our Company, Dr.&nbsp;Forkey spent seven years at the University of Pennsylvania Medical School as a postdoctoral fellow and research staff member.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Joel R. Pitlor<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>71</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>1990</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Since 1979, Mr.&nbsp;Pitlor has been President of J.R. Pitlor, a management consulting firm that provides strategic business
planning, which Mr.&nbsp;Pitlor founded. Mr.&nbsp;Pitlor has provided business planning consultation to our Company since 1983.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Donald A. Major<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>48</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2005</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Since 2002, Mr.&nbsp;Major has served as Vice President and Treasurer of Anderson Entertainment,&nbsp;LLC (formerly Digital
Excellence&nbsp;LLC). From October 2006 to May&nbsp;2007, Mr.&nbsp;Major served as Vice President of Corporate Development of Advanced Duplication Services&nbsp;LLC. Since October 2007, Mr.&nbsp;Major's primary occupation has been as an independent
consultant to a private equity firm where he is engaged in identifying, evaluating and implementing corporate investment opportunities.</FONT></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Name</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Age</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Director<BR>
Since</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Principal Occupation; Directorships of Other Public Companies</B></FONT><BR></TH>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Richard Miles<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>66</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2005</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Since 1972, Professor Miles has been a member of the faculty at Princeton University, and serves as the Director of the Applied Physics Group in
Princeton University's Mechanical and Aerospace Engineering Department.</FONT></TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Directors
whose terms do not expire this year.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Richard
E. Forkey is the father of Joseph N. Forkey. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Director Independence  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>During the fiscal year ended June&nbsp;30, 2009, the individuals named in the table above served as members of our Board of Directors. Of those
individuals, Messrs.&nbsp;Pitlor, Major and Miles are "independent" as defined in Rule&nbsp;5605 of the Nasdaq Marketplace Rules. Our common stock is traded on the
Over-The-Counter Bulletin Board, referred to herein as the OTCBB. The OTCBB does not have a requirement that we have a majority of independent directors on our Board. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Board of Directors  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>During the fiscal year ended June&nbsp;30, 2009, our Board of Directors held two meetings and acted by unanimous written consent on two occasions.
Each director attended at least 75% of the meetings of the Board of Directors. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>While
we have no formal policy in place regarding board members' attendance at annual meetings of stockholders, we encourage their attendance at such annual meetings. There were three members of the
Board of Directors in attendance at our 2008 Annual Meeting of Stockholders. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Information
as to ownership of our securities by the nominee for director is included under the heading "Security Ownership of Certain Beneficial Owners and Management." </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>While
the Board does not have a standing nominating committee, it does have a standing Audit Committee and a standing Compensation Committee. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Audit Committee  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Audit Committee of the Board of Directors is currently composed of Messrs.&nbsp;Major and Miles. The Audit Committee has adopted a charter
which is included as Appendix&nbsp;A to this Proxy Statement. The Audit Committee's primary function is to assist the Board of Directors in monitoring the integrity of our Company's financial
statements, systems of internal control and the independence and performance of the independent registered public accounting firm. The Audit Committee's specifically enumerated powers and
responsibilities include hiring and terminating the independent registered public accounting firm and pre-approving any engagements of the independent registered public accounting firm for
audit and all permitted non-audit services. The Audit Committee held four meetings during the fiscal year ended June&nbsp;30, 2009. Each of the Audit Committee members attended 100% of
the meetings of the Audit Committee held during the fiscal year ended June&nbsp;30, 2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>4</FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Board of Directors has made a determination that Mr.&nbsp;Major, Chair of the Audit Committee, qualifies as an audit committee financial expert meeting the criteria set forth in
Item&nbsp;407(d)(5) of Regulation&nbsp;S-K. We have determined that Mr.&nbsp;Major is "independent" as independence for audit committee members is defined in Rule&nbsp;5605 of the
Nasdaq Marketplace Rules and Rule&nbsp;10A-3 of the Securities Exchange Act of 1934. Mr.&nbsp;Major has an understanding of generally accepted accounting principles and financial
statements and has the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves. He also has over seven years of experience,
including five years in a supervisory capacity, auditing, analyzing and evaluating financial statements that had a breadth and level of complexity of accounting issues that are generally comparable to
the breadth and complexity of issues that can reasonably be expected to be raised by our Company's financial statements. Additionally, Mr.&nbsp;Major served as the Chief Financial Officer to several
public and private companies over a span of 18&nbsp;years where he was responsible for preparing financial statements. He has an understanding of internal controls over financial reporting and an
understanding of audit committee functions. Mr.&nbsp;Major earned his BA in Accounting in 1984 from Michigan State University. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Compensation Committee  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Board of Directors formed a compensation committee in April 2006. The Compensation Committee is currently composed of Messrs.&nbsp;Major and
Miles, with Mr.&nbsp;Major serving as Chair of the committee. The Compensation Committee does not have a charter. The Compensation Committee's primary functions are to provide a general review of
our Company's compensation and benefit arrangements and to review and establish compensation practices and policies for our officers. The Compensation Committee held no meetings during the fiscal year
ended June&nbsp;30, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Director Nomination Procedures  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We believe that it is appropriate not to have a standing nominating committee because of the small size of the Board of Directors. The Board of
Directors as a whole identifies and evaluates nominees for election to the Board of Directors. By having the Board of Directors as a whole consider and evaluate nominees, the Board of Directors weighs
the input of all directors. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
process by which the Board of Directors considers nominees for membership on the Board of Directors is flexible and based, generally, on the directors' assessment of the needs of our Company and
the extent to which existing directors meet those needs. Factors considered by the Board of Directors in evaluating the suitability of a potential nominee may include, but not be limited to: business
and management experience, familiarity with our Company's industry and products, the ability to integrate with existing directors and management and the extent to which a potential nominee may satisfy
applicable requirements such as independence or expertise requirements under the securities laws. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Board of Directors will consider director nominees recommended by stockholders and will assess the qualities of the candidate and needs of our Company as described above. Such recommendations
should include the name, age, address, telephone number, principal occupation, background and qualifications of the nominee and the name, address, telephone number of and number of shares of common
stock beneficially owned by the stockholder making the recommendation and should be sent to our Clerk at 22&nbsp;East Broadway, Gardner, Massachusetts 01440. Such recommendations should be submitted
to our Clerk prior to June&nbsp;15 of the respective year in order to give us adequate time in order to consider the recommendations. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>5</FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>All
of the stockholders holding shares of our common stock are entitled to cast one vote in person or by proxy for each share standing in their names and are entitled to elect one Class&nbsp;I
director at the 2009 Annual Meeting. If a nominee is not available as a candidate when the election occurs, the persons named in the proxy may, in their discretion, vote for the election of such other
person as the Board of Directors may designate or reduce the number of directors correspondingly. We have no reason to believe the nominee will not be available for election. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>The Board recommends that the stockholders vote FOR the nominee for election to the Board. Proxies will be voted in favor of the nominee unless a stockholder has indicated
otherwise in the proxy.</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dc74501_other_matters"> </A>
<A NAME="toc_dc74501_2"> </A>
<BR></FONT><FONT SIZE=2><B>  OTHER MATTERS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Board of Directors does not know of any other matters that will be presented or acted upon at the 2009 Annual Meeting. If any other matter is
properly presented at the 2009 Annual Meeting on which a vote may properly be taken, the shares represented by proxies will be voted in accordance with the judgment of the person or persons voting
those shares. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de74501_executive_officers"> </A>
<A NAME="toc_de74501_1"> </A>
<BR></FONT><FONT SIZE=2><B>  EXECUTIVE OFFICERS    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table below identifies our executive officers as of June&nbsp;30, 2009: </FONT></P>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:26pt;"><FONT SIZE=2><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:16pt;"><FONT SIZE=2><B>Age

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:31pt;"><FONT SIZE=2><B>Offices

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 </B></FONT></DIV></TH>
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<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Richard E. Forkey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>69</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>President, Chief Executive Officer and Treasurer</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Joseph N. Forkey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>41</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Executive Vice President and Chief Scientific Officer</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Jack P. Dreimiller</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>61</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Senior Vice President, Chief Financial Officer and Clerk</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>Mr.&nbsp;Richard
E. Forkey has served as our President, Chief Executive Officer, Treasurer, and a director since he founded our Company in 1982. He served as our Clerk from May 1983 to June 1990. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Dr.&nbsp;Joseph
N. Forkey, son of Richard E. Forkey, served has our Executive Vice President and Chief Scientific Officer since April 2006 and served as our Chief Scientist from September 2003 to
April 2006. Since joining our Company, he has been involved in general technical and management activities, as well as investigations of opportunities that leverage our newly developed technologies.
Dr.&nbsp;Forkey holds B.A. degrees in Mathematics and Physics from Cornell University, and a Ph.D. in Mechanical and Aerospace Engineering from Princeton University. Prior to joining our Company,
Dr.&nbsp;Forkey spent seven years at the University of Pennsylvania Medical School as a postdoctoral fellow and research staff member. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Jack
P. Dreimiller has served as our Senior Vice President, Finance, Chief Financial Officer and Clerk since August&nbsp;15, 2008 and also served as our Senior Vice President, Finance and Chief
Financial Officer from April 1992 until June 2005 and our Clerk from January 1998 until June 2005. Since June 2005, he has served as an independent consultant serving various roles as
financial/accounting executive, including interim Chief Financial Officer, for a number of companies. From June 2005 to December 2005, he was an independent consultant to our Company. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de74501_certain_relationships_and_related_transactions"> </A>
<A NAME="toc_de74501_2"> </A>
<BR></FONT><FONT SIZE=2><B>  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We have an arrangement with J.R. Pitlor, a company wholly-owned by Mr.&nbsp;Joel R. Pitlor, our director, under which Mr.&nbsp;Pitlor provides
consulting services to our Company for a fee currently not to exceed $5,000 per month. These consulting services consist primarily of advice regarding marketing, strategic planning and other general
business issues. Either party may terminate this arrangement at will. We paid or accrued to J.R. Pitlor for consulting services aggregate fees of $60,000, or $5,000 per month, for each of the fiscal
years 2009 and 2008. $85,000 of this amount has
been deferred, and Mr.&nbsp;Pitlor has agreed that such fees may be paid in the form of our restricted common stock. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
lease our facility in Gardner, Massachusetts from Equity Assets,&nbsp;Inc., a company wholly-owned by Mr.&nbsp;Richard E. Forkey, our President, Chief Executive Officer, Treasurer and director.
We are currently a tenant-at-will, paying rent of $9,000 per month, or an aggregate of $108,000 per year, for each of fiscal years 2009 and 2008. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>It
is our policy that all employees, officers and directors must avoid any activity that is or has the appearance of conflicting with the interests of our Company. This policy is included in our
Corporate Code of Ethics and Conduct, and our Employee Manual. We conduct a review of all related party transactions for potential conflicts of interest situations on an ongoing basis and all such
transactions relating to officers and directors must be approved by the Audit Committee. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>7</FONT></P>

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<A NAME="page_de74501_1_8"> </A>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>A
conflict of interest occurs when the private interest of an employee or director (or an immediate family or household member) interferes, in any way&nbsp;&#151; or even appears to
interfere&nbsp;&#151; with the duties performed by the employee or director or with the interests of our Company as a whole. A conflict situation can arise when an employee, officer or
director takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest also arise when an employee, officer or director, or a
member of his or her family, receives improper personal benefits as a result of his or her position in our Company. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We
require that all employees, officers and directors report to the Chief Financial Officer and/or the Audit Committee any conduct that the individual believes to be a violation of law or business
ethics or of any provision of the Code, including any transaction or relationship that reasonably could be expected to give rise to such a conflict. Violations, including failures to report potential
violations by others, will be viewed as a severe disciplinary matter that may result in personnel action, including termination of employment. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>To
this end, our employees, officers or directors may not be employed by, act as a consultant to, or have an independent business relationship with any of our customers, competitors or suppliers. Nor
may employees, officers or directors invest in any customer, supplier, or competitor (other than through
mutual funds or through holdings of less than 2&nbsp;percent of the outstanding shares of publicly traded securities) unless they first obtain written permission from our Chief Executive Officer.
Employees, officers or directors may not divulge or use our confidential information&nbsp;&#151; such as financial data, customer information, and computer programs&nbsp;&#151; for
their own personal or business purposes. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Any
personal or business activities by an employee, officer or director that may raise the foregoing concerns must be disclosed to and approved in advance by our Chief Financial Officer. The Audit
Committee will determine whether violations of the Code have occurred and, if so, will determine the disciplinary measures to be taken against any employee who has violated the Code. Disciplinary
measures, which may be invoked at the discretion of the Audit Committee, include, but are not limited to, oral or written warnings, disciplinary probation, suspension, reductions in salary, demotion
or termination of employment. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de74501_section_16(a)_benefici__de702025"> </A>
<A NAME="toc_de74501_3"> </A>
<BR></FONT><FONT SIZE=2><B>  SECTION&nbsp;16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Section&nbsp;16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who beneficially own more than 10%
of a registered class of our securities to file with the Securities Exchange Commission, or SEC, reports of ownership and changes in ownership of common stock and other equity securities of our
Company. Officers, directors and greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section&nbsp;16(a) forms they file. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>To
our knowledge, based solely upon a review of Forms&nbsp;3 and 4 and amendments thereto furnished to us during the fiscal year ended June&nbsp;30, 2009 and Forms&nbsp;5 and amendments thereto
furnished to us with respect to such fiscal year, no person required to file reports under Section&nbsp;16(a) of the Securities Exchange Act of 1934 failed to file such reports on a timely basis
during such fiscal year. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>8</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_de74501_4"> </A>
<BR></FONT><FONT SIZE=2><B>  EXECUTIVE AND DIRECTOR COMPENSATION    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Summary Compensation  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table sets forth all compensation for the last two completed fiscal years ended June&nbsp;30, 2009 and 2008 awarded to, earned by, or
paid to our Principal Executive Officer, Vice President and Chief Scientific Officer and one of our employees, referred to herein as the "Named Executive Officers." No other executive officer or
employee earned over $100,000 in the last completed fiscal year. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de74501_summary_compensation_table_for__sum02421"> </A>
<A NAME="toc_de74501_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Summary Compensation Table for the Fiscal Years Ended June&nbsp;30, 2009 and 2008    <BR>    </B></FONT></P>

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<TD WIDTH="64" style="font-family:times;"></TD>
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<TD WIDTH="64" style="font-family:times;"></TD>
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<TD WIDTH="64" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name and principal<BR>
position<BR>
(a)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Year<BR>
June&nbsp;30,<BR>
(b)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Salary<BR>
($)<BR>
(c)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Bonus<BR>
($)<BR>
(d)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock<BR>
awards<BR>
($)<BR>
(e)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option<BR>
awards<BR>
($)<BR>
(f)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Non-equity<BR>
incentive<BR>
plan<BR>
compensation<BR>
($)<BR>
(g)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Non-qualified<BR>
deferred<BR>
compensation<BR>
earnings<BR>
($)<BR>
(h)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All other<BR>
compensation<BR>
($)<BR>
(i)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
($)<BR>
(j)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=19 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
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<TD style="font-family:times;"><FONT SIZE=2>


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 Richard E. Forkey</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><FONT SIZE=2>


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 President, Principal</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Executive Officer</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2009</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$195,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>$22,162 <SUP>(1)(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$217,162</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 and Treasurer</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2008</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$195,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>$24,547 <SUP>(1)(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$219,547</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><BR><FONT SIZE=2> Joseph N. Forkey</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>Executive Vice President and Chief</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2009</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$120,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$120,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>Scientific Officer</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2008</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$120,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(4)</SUP></FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>$1,200 <SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$121,200</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><BR><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Richard G. Cyr</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>2009</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>$119,025</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>$119,025</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Optical Shop Manager</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2008</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$117,027</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>-0-</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>$1,236 <SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>$118,263</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" >


<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Includes
car expense of $2,100 for 2009 and 2008.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Includes
premiums for a life insurance policy and a disability insurance policy of $18,162 for 2009 and $18,579 for 2008, and $1,968 for our Company's
matching contribution to the Profit Sharing and 401(k) Plan for 2008.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Represents
our Company's matching contribution to the Profit Sharing and 401(k) Plan.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Based
on new compensation arrangements approved by the Board of Directors on April&nbsp;15, 2008 for the President and for the Chief Scientific Officer,
$163,848 and $12,000, respectively, of these amounts were deferred in 2009 and $66,883 and $923, respectively, were deferred in 2008, and will be paid in the form of restricted stock that will be
subject to future performance based vesting. </FONT></DD></DL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Employment Contracts and Termination of Employment Arrangements  </I></B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On April&nbsp;15, 2008, the Board of Directors approved new compensation arrangements for Richard E. Forkey and Joseph N. Forkey. Pursuant to these
arrangements, a portion of their base salary, as detailed in the Summary Compensation Table and related footnotes, would be deferred and paid in the form of shares of our restricted common stock. The
common stock will be subject to a vesting schedule based on certain performance criteria being met. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Except
as described above, we have no employment contracts, agreements or arrangements in place with any Named Executive Officer. We have no compensatory plan or arrangement with respect to any Named
Executive Officer where such plan or arrangement will result in payments to such Named Executive Officer upon or following his resignation, or other termination of employment with our Company and its </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=12,EFW="2195005",CP="PRECISION OPTICS CORPORATION,INC",DN="1",CHK=849299,FOLIO='9',FILE='DISK116:[09ZDY1.09ZDY74501]DE74501A.;46',USER='LPALLES',CD='22-OCT-2009;10:20' -->
<A NAME="page_de74501_1_10"> </A>
<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>subsidiaries,
or as a result of a change-in-control of our Company or a change in the Named Executive Officers' responsibilities following a
change-in-control. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Outstanding Equity Awards at Fiscal Year-End  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table shows grants of options outstanding on June&nbsp;30, 2009, the last day of our fiscal year, to each of the Named Executive
Officers named in the Summary Compensation Table. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de74501_outstanding_equity_awards_at_f__out03729"> </A>
<A NAME="toc_de74501_6"> </A>
<BR></FONT><FONT SIZE=2><B>  Outstanding Equity Awards at Fiscal Year-End Table for the Fiscal Year Ended June&nbsp;30, 2009<BR>  <BR>    Option awards    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="120pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="120pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="47pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><B>Name<BR>
(a)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Number of<BR>
securities underlying<BR>
unexercised options<BR>
(#)<BR>
exercisable<BR>
(b)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Number of<BR>
securities underlying<BR>
unexercised options<BR>
(#)<BR>
unexercisable<BR>
(c)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Option<BR>
exercise<BR>
price<BR>
($)<BR>
(e)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Option<BR>
expiration<BR>
date<BR>
(f)</B></FONT><BR></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=12 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Richard E. Forkey</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14,944</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13.75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>5/9/2016</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>14,944</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20.75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6/13/2015</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Joseph N. Forkey</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><p align=center style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;600</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><p align=center style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
13.75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>5/9/2016</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>11,208</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>13.75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6/13/2015</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>22,416</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20.75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6/13/2015</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


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 Richard G. Cyr</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><p align=center style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>7,534</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><p align=center style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2,666 <SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
13.75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><p align=center style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>5/9/2016</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>These
options will become exercisable in equal installments on May&nbsp;9, 2010 and May&nbsp;9, 2011. </FONT></DD></DL>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Option Grants in Last Fiscal Year  </I></B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We did not grant stock options during the fiscal year ended June&nbsp;30, 2009 to any of our Named Executive Officers. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Long Term Incentive Plans; Awards in Last Fiscal Year  </I></B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We did not grant awards under a long-term incentive plan in the fiscal year ended June&nbsp;30, 2009. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> Profit Sharing and 401(k) Plan  </I></B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We have a defined contribution 401(k) profit sharing plan, referred to as the "Profit Sharing and 401(k) Plan" or the "Plan." Employer profit sharing
and matching contributions to the Plan are discretionary. No employer profit sharing contributions were made to the Plan in fiscal year 2009 or 2008. Employer matching contributions to the plan
amounted to $0 and $17,473 for fiscal years 2009 and 2008, respectively. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>10</FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Director Compensation  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table sets forth all compensation paid to our directors during the fiscal year ended June&nbsp;30, 2009: </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="de74501_director_compensation_table_fo__dir02270"> </A>
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<BR></FONT><FONT SIZE=2><B>  Director Compensation Table for the Fiscal Year Ended June&nbsp;30, 2009    <BR>    </B></FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="26%" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="56" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="35" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="35" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="67" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="64" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="64" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="41" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name<SUP>(1)</SUP><BR>
(a)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Fees earned<BR>
or paid in<BR>
cash<BR>
($)<BR>
(b)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock<BR>
awards<BR>
($)<BR>
(c)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option<BR>
awards<BR>
($)<BR>
(d)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Non-equity<BR>
incentive plan<BR>
compensation<BR>
($)<BR>
(e)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Non-qualified<BR>
deferred<BR>
compensation<BR>
earnings<BR>
($)<BR>
(f)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All other<BR>
compensation<BR>
($)<BR>
(g)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
($)<BR>
(h)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR style="font-size:1.5pt;" VALIGN="BOTTOM">
<TH COLSPAN=15 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TH>
<TH style="font-family:times;">&nbsp;</TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Joel R. Pitlor</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$500 <SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$482</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(4)(6)</SUP></FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$60,000 <SUP>(5)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$60,982</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Donald A. Major</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$7,000 <SUP>(2)(3)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$482</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(4)(7)</SUP></FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$7,482</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Richard B. Miles</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$1,000 <SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$482</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><SUP>(4)(8)</SUP></FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$1,482</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>This
table does not include directors whose compensation is reflected in the Summary Compensation Table.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>We
pay each director, who is not also an employee of our Company, $250 per board or committee meeting that the director attends and reimburse the director
for travel expenses.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>For
his service to our Company in his capacity as Chair of the Audit Committee, Mr.&nbsp;Major receives compensation of $500 per month, which is in
addition to the standard compensation received by all members of the Board of Directors for their services.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Each
of Messrs.&nbsp;Major, Miles and Pitlor were issued options to purchase 400 shares of our common stock at our annual meeting held in November 2008.
These options were immediately exercisable at a price per share of $0.05, which was the closing price of our common stock on the Over-the-Counter Bulletin Board on the date of
grant. These options will remain exercisable following a director's departure from service and expire on November&nbsp;25, 2018. The amounts shown reflect the dollar amounts computed for financial
statement reporting purposes for fiscal 2009 in accordance with the requirements of SFAS&nbsp;123(R), excluding an estimate of forfeitures. Refer to Note&nbsp;4, "Stockholders' Equity-Stock
Options," in the Notes to the Consolidated Financial Statements included in our financial statements for the fiscal year ended June&nbsp;30, 2009, for the relevant assumptions used to determine the
valuation of option awards.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Mr.&nbsp;Pitlor
is paid $60,000 per year, or $5,000 per month, for his services as a consultant to our Company. $60,000 of this amount has been deferred,
and Mr.&nbsp;Pitlor has agreed that such fees may be paid in the form of our restricted common stock.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>As
of June&nbsp;30, 2009, Mr.&nbsp;Pitlor held a total of 1,978 options to purchase shares of our common stock.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>As
of June&nbsp;30, 2009, Mr.&nbsp;Major held a total of 2,000 options to purchase shares of our common stock.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(8)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>As
of June&nbsp;30, 2009, Mr.&nbsp;Miles held a total of 1,600 options to purchase shares of our common stock. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>11</FONT></P>

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</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dg74501_security_ownership_of_certain___sec03823"> </A>
<A NAME="toc_dg74501_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT<BR>  AND RELATED STOCKHOLDER MATTERS    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Securities Authorized for Issuance under Equity Compensation Plans  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>As of June&nbsp;30, 2009, our equity securities authorized for issuance, aggregated, are as follows: </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> Equity Compensation Plan Information  </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="120pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="101pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="120pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:59pt;"><FONT SIZE=2><B>Plan Category

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Number of securities<BR>
to be issued upon<BR>
exercise of<BR>
outstanding<BR>
options, warrants<BR>
and rights<BR>
(a) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Weighted-average<BR>
exercise price of<BR>
outstanding<BR>
options,<BR>
warrants and<BR>
rights<BR>
(b) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Number of securities<BR>
remaining available<BR>
under equity<BR>
compensation plans<BR>
(excluding securities<BR>
reflected in<BR>
column (a))<BR>
(c) </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=2>Equity compensation plans approved by security holders</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>93,178</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>16.17</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>135,898</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><BR><FONT SIZE=2> Equity compensation plans not approved by security holders</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><BR><FONT SIZE=2><B> Total</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2><B> 93,178</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT SIZE=2><B><BR></B></FONT><FONT SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><B><BR>
16.17</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2><B>135,898</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Equity Incentive Plans  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>On November&nbsp;28, 2006, our stockholders approved the 2006 Equity Incentive Plan, referred to as the 2006 Incentive Plan, which succeeds our
Amended and Restated 1997 Equity Incentive Plan, referred to as the 1997 Incentive Plan. No further awards have been or will be granted under the 1997 Incentive Plan. Our Board of Directors had
previously approved the 2006 Incentive Plan, subject to the approval of our stockholders. The 2006 Incentive Plan allows for the grant of stock options to selected employees, directors and other
persons who provide services to our Company or its affiliates. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Security Ownership of Certain Beneficial Owners and Management  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The following table sets forth information regarding our common stock beneficially owned as of the close of business on October&nbsp;1, 2009 by the
following persons: (i)&nbsp;each person who is known by us to own beneficially more than 5% of our common stock; (ii)&nbsp;each of our directors and nominees for director who beneficially own our
Company's or its subsidiaries' common stock; (iii)&nbsp;each of our Named Executive Officers who beneficially own our Company's or its subsidiaries' common stock; and (iv)&nbsp;all executive
officers and directors, as a group, who beneficially own our Company's or its subsidiaries' common stock. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
information on beneficial ownership in the table and footnotes thereto is based upon data furnished to us by, or on behalf of, the persons listed in the table. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="133pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="101pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Name and Address of Beneficial Owner </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Amount and Nature of<BR>
Beneficial Ownership<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Percent of Class<SUP>(2)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>AIGH Investment Partners,&nbsp;LLC<BR>
6006 Berkeley Avenue, Baltimore, MD 21209</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>190,208</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> Austin W. Marxe<BR>
c/o Special Situations Funds<BR>
527 Madison Avenue, Suite&nbsp;2600, New York, NY 10022</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>1,591,337</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>71.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> David M. Greenhouse<BR>
c/o Special Situations Funds<BR>
527 Madison Avenue, Suite&nbsp;2600, New York, NY 10022</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>1,591,133</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(5)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>71.9</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> Arnold Schumsky<BR>
145 East 27th&nbsp;Street<BR>
New York, New York 10016</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>138,406</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(6)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>12.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;border-bottom:solid #000000 1.0pt;"><BR><FONT SIZE=2><B>Directors and Named Executive Officers</B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Joseph N. Forkey<BR>
c/o Precision Optics Corporation,&nbsp;Inc.<BR>
22 East Broadway, Gardner, MA 01440</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>34,712</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><SUP>(7)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3.3</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> Richard E. Forkey<BR>
c/o Precision Optics Corporation,&nbsp;Inc.<BR>
22 East Broadway, Gardner, MA 01440</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>42,504</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(8)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>4.1</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> Donald A. Major<BR>
c/o Precision Optics Corporation,&nbsp;Inc.<BR>
22 East Broadway, Gardner, MA 01440</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>6,000</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(9)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>*</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> Richard B. Miles<BR>
c/o Precision Optics Corporation,&nbsp;Inc.<BR>
22 East Broadway, Gardner, MA 01440</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>5,600</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(10)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>*</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> Joel R. Pitlor<BR>
c/o Precision Optics Corporation,&nbsp;Inc.<BR>
22 East Broadway, Gardner, MA 01440</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>193,737</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(11)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>18.0</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> Richard G. Cyr<BR>
c/o Precision Optics Corporation,&nbsp;Inc.<BR>
22 East Broadway, Gardner, MA 01440</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>7,534</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(12)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>*</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2> All executive officers and directors as a group, including those named above (6 persons)</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>283,136</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR><SUP>(13)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT SIZE=2>24.7</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
</TABLE></DIV>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Less
than 1%
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Represents
shares with respect to which each beneficial owner listed has or will have, upon acquisition of such shares upon exercise or conversion of
options, warrants, conversion privileges or other rights exercisable within 60&nbsp;days of October&nbsp;1, 2009, sole voting and investment power. Amounts listed have been adjusted to reflect a
1-for-25 reverse split, effective December&nbsp;11, 2008.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>As
of October&nbsp;1, 2009, we had 1,018,411 shares of our common stock issued and outstanding. Percentages are calculated on the basis of the amount of
issued and outstanding common stock plus, for each person or </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>13</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>group,
any securities that such person or group has the right to acquire within 60&nbsp;days of October&nbsp;1, 2009 pursuant to options, warrants, conversion privileges or other rights. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Holdings
as of April&nbsp;13, 2006, as reported on Schedule&nbsp;13D filed with the SEC on May&nbsp;3, 2006 by Orin Hirschman. AIGH Investment
Partners&nbsp;LLC and Orin Hirschman, managing member of AIGH, have shared voting and dispositive control over the shares.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Represents
(i)&nbsp;1,097 shares of common stock owned of record by Special Situations Cayman Fund,&nbsp;L.P., or SSCF, (ii)&nbsp;4,181 shares of
common stock owned of record by Special Situations Fund III,&nbsp;L.P., or SSF&nbsp;III, (iii)&nbsp;207,699 shares of common stock owned of record by Special Situations Fund III QP,&nbsp;L.P.,
or SSF III QP, (iv)&nbsp;232,728 shares that may be acquired under an outstanding warrant held by SSF III QP, which is immediately exercisable, (v)&nbsp;145,200 shares that may be acquired under
an outstanding warrant held by SSF&nbsp;III&nbsp;QP, which is immediately exercisable, (vi)&nbsp;220,000 shares that may be acquired upon conversion of a convertible promissory note held by SSF
III QP, (vi)&nbsp;160,000 shares of common stock owned of record by Special Situations Private Equity Fund,&nbsp;L.P., or SSPEF, (vii)&nbsp;145,200 shares that may be acquired under an
outstanding warrant held by SSPEF, which is immediately exercisable, (viii)&nbsp;220,000 shares that may be acquired upon conversion of a convertible promissory note held by SSPEF,
(ix)&nbsp;232,728 shares that may be acquired under an outstanding warrant held by SSPEF, which is immediately exercisable, and (x)&nbsp;22,300 shares of common stock owned by Special Situations
Technology Fund II,&nbsp;L.P., or SSTF II. SSCF, SSF III, SSF III QP, SSPEF and SSTF II are affiliated funds. <BR></FONT>
<BR>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>MGP
is the general partner of the SSF III QP and the general partner of and investment adviser to SSF III. AWM is the general partner of MGP, the general partner of and investment adviser to SSFCF and
the investment adviser to SSF III QP, SSCF, SSFTF II and SSPEF. Messrs.&nbsp;Marxe and Greenhouse are the principal owners of MGP and AWM. Through their control of MGP and AWM, Messrs.&nbsp;Marxe
and Greenhouse share voting and dispositive control over the portfolio securities of each of the funds listed above. Also includes 204 shares that may be acquired by Mr.&nbsp;Marxe within
60&nbsp;days upon the exercise of outstanding stock options.  </FONT></P>

</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Represents
(i)&nbsp;1,097 shares of common stock owned of record by Special Situations Cayman Fund,&nbsp;L.P., or SSCF, (ii)&nbsp;4,181 shares of
common stock owned of record by Special Situations Fund III,&nbsp;L.P., or SSF III, (iii)&nbsp;207,699 shares of common stock owned of record by Special Situations Fund III QP,&nbsp;L.P., or SSF
III QP, (iv)&nbsp;232,728 shares that may be acquired under an outstanding warrant held by SSF III QP, which is immediately exercisable, (v)&nbsp;145,200 shares that may be acquired under an
outstanding warrant held by SSF III QP, which is immediately exercisable, (vi)&nbsp;220,000 shares that may be acquired upon conversion of a convertible promissory note held by SSF III QP,
(vii)&nbsp;160,000 shares of common stock owned of record by Special Situations Private Equity Fund,&nbsp;L.P., or SSPEF, (viii)&nbsp;145,200 shares that may be acquired under an outstanding
warrant held by SSPEF, which is immediately exercisable, (ix)&nbsp;220,000 shares that may be acquired upon conversion of a convertible promissory note held by SSPEF, (x)&nbsp;232,728 shares that
may be acquired under an outstanding warrant held by SSPEF, which is immediately exercisable, and (xi)&nbsp;22,300 shares of common stock owned by Special Situations Technology Fund II,&nbsp;L.P.,
or SSTF II. SSCF, SSF III, SSF III QP, SSPEF and SSTF II are affiliated funds. MGP is the general partner of the SSF III QP and the general partner of and investment adviser to SSF III. AWM is the
general partner of MGP, the general partner of and investment adviser to SSFCF and the investment adviser to SSF III QP, SSCF, SSFTF II and SSPEF. Messrs.&nbsp;Marxe and Greenhouse are the principal
owners of MGP and AWM. Through their control of MGP and AWM, Messrs.&nbsp;Marxe and Greenhouse share voting and dispositive control over the portfolio securities of each of the funds listed above.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Includes
34,910 shares that may be acquired upon exercise of an outstanding warrant which is immediately exercisable, 26,400 shares that may be acquired
upon exercise of an outstanding warrant which is immediately exercisable and 40,000 shares that may be acquired upon conversion of a convertible promissory note. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>14</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;text-align:justify"></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Represents
34,224 shares which may be acquired within 60&nbsp;days of October&nbsp;1, 2009, upon the exercise of outstanding stock options and 488
shares owned by Dr.&nbsp;Forkey and his wife, Heather C. Forkey, with whom he shares voting and dispositive control.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(8)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Includes
29,888 shares which may be acquired within 60&nbsp;days of October&nbsp;1, 2009, upon the exercise of outstanding stock options.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(9)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Includes
2,000 shares which may be acquired within 60&nbsp;days of October&nbsp;1, 2009, upon the exercise of outstanding stock options.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(10)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Includes
1,600 shares which may be acquired within 60&nbsp;days of October&nbsp;1, 2009, upon the exercise of outstanding stock options.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(11)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Includes
1,978 shares which may be acquired within 60&nbsp;days of October&nbsp;1, 2009, upon the exercise of outstanding stock options, and 58,182
shares that may be acquired upon exercise of an outstanding warrant, which is immediately exercisable.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(12)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Represents
7,534 shares which may be acquired within 60&nbsp;days of October&nbsp;1, 2009, upon the exercise of outstanding stock options.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(13)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Includes
69,690 shares which may be acquired within 60&nbsp;days of October&nbsp;1, 2009 upon the exercise of outstanding stock options and 58,182
shares that may be acquired upon exercise of an outstanding warrant, which is immediately exercisable. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>15</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di74501_independent_public_accountants"> </A>
<A NAME="toc_di74501_1"> </A>
<BR></FONT><FONT SIZE=2><B>  INDEPENDENT PUBLIC ACCOUNTANTS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><I> Independent Registered Public Accounting Firm Fees  </I></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our principal and only independent registered public accountant for the fiscal year ended June&nbsp;30, 2009 is Stowe&nbsp;&amp; Degon&nbsp;LLC.
The following table presents fees for professional audit services and other services rendered by Stowe and Caturano&nbsp;&amp; Company,&nbsp;Ltd. for the fiscal years ended June&nbsp;30, 2009 and
2008: </FONT></P>
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<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="45pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Audit Fees<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>94,407</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>88,265</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Audit-Related Fees<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Audit and Audit-Related Fees</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>94,407</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>88,265</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax Fees<SUP>(3)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>7,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All Other Fees<SUP>(4)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Fees</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>101,907</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>95,765</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Audit
fees for fiscal 2009 are comprised of: (i)&nbsp;fees for professional services performed by Stowe for the audit of our annual financial statements
and review of our quarterly financial statements of $68,519, including direct out-of-pocket expenses in the amount of $519; and (ii)&nbsp;fees for attestation services
performed by Stowe and Caturano in connection with the filing of our registration statement on Form&nbsp;S-1 of $25,888. </FONT></DD></DL>
<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Audit
fees for fiscal 2008 are comprised of fees for professional services performed for the audit of our annual financial statements (Stowe) and review of our quarterly financial statements (Stowe
and Caturano) of $88,265, including direct out-of-pocket expenses in the amount of $1,078.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Audit-related
fees are comprised of fees for assurance and related attestation services that are reasonably related to the performance of the audit of our
annual financial statements or the review thereof and fees for due diligence services.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>Tax
fees for fiscal 2009 and 2008 by Stowe are comprised of fees for professional services performed with respect to corporate tax compliance, tax planning
and tax advice.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;text-align:justify"><FONT SIZE=2>We
did not incur any other fees during fiscal 2009 or 2008 for products and services provided by Stowe or Caturano other than those disclosed above. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Annual Meeting  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>We expect that representatives from Stowe&nbsp;&amp; Degon&nbsp;LLC will be present at the 2009 Annual Meeting of Stockholders and will be available
to respond to appropriate questions and have the opportunity to make a statement if they desire. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Audit Committee Pre-Approval Policies  </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Audit Committee has established pre-approval policies and procedures that would prohibit engagement of accountants to render audit or
non-audit services without prior approval of the Audit Committee. As a result, all engagements of the independent auditors to render any services, whether they would be deemed audit or
non-audit services, require pre-approval of the Audit Committee. No audit, review or attest services were approved in accordance with
Section&nbsp;2-01(c)(7)(i)(C) of Regulation&nbsp;S-X during the fiscal year ended June&nbsp;30, 2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>16</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di74501_audit_committee_report"> </A>
<A NAME="toc_di74501_2"> </A>
<BR></FONT><FONT SIZE=2><B>  AUDIT COMMITTEE REPORT    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>The Audit Committee is composed of Messrs.&nbsp;Major and Miles, each of whom is "independent" as defined in Rule&nbsp;5605 of the Nasdaq
Marketplace Rules. The Board of Directors has adopted a written charter for the Audit Committee, which is filed with this Proxy Statement as Appendix&nbsp;A. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Audit Committee has submitted the following report: </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The
Audit Committee has reviewed and discussed with management the audited consolidated financial statements for the fiscal year ended June&nbsp;30, 2009, and has discussed with the Company's
independent auditors the matters required to be discussed by Statement on Auditing Standards No.&nbsp;61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule&nbsp;3200T
(SAS 61). SAS 61 requires independent auditors to communicate to the Audit Committee various matters, including, if applicable: (1)&nbsp;methods used to account for certain unusual transactions;
(2)&nbsp;the effect of certain accounting policies in controversial or emerging areas for which there is a lack of authoritative
guidance or consensus; (3)&nbsp;the process used by management in formulating certain accounting estimates and the basis for the auditor's conclusions regarding the reasonableness of those
estimates; and (4)&nbsp;disagreements with management over the application of accounting principles and certain other matters. The Audit Committee has received the written disclosures and the letter
from the Company's independent accountants required by Independence Standards Board Standard No.&nbsp;1 (requiring auditors to make written disclosures to, and to discuss with, the Audit Committee,
various matters relating to the auditor's independence), has discussed with the accountants their independence and has considered whether the provision of non-audit services by the
accountants is compatible with maintaining that independence. Based on the foregoing and further review and discussion, the Audit Committee recommended to the Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form&nbsp;10-K for the fiscal year ended June&nbsp;30, 2009 for filing with the Securities and Exchange Commission. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Donald
Major<BR>
Richard Miles </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>October
2009 </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>17</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di74501_corporate_code_of_ethics_and_conduct"> </A>
<A NAME="toc_di74501_3"> </A>
<BR></FONT><FONT SIZE=2><B>  CORPORATE CODE OF ETHICS AND CONDUCT    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Our Board of Directors adopted a Corporate Code of Ethics and Conduct applicable to all of our employees, officers and directors, including our
principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code was filed as an exhibit to our Annual Report on
Form&nbsp;10-K for the year ended June&nbsp;30, 2008. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di74501_stockholder_communications"> </A>
<A NAME="toc_di74501_4"> </A>
<BR></FONT><FONT SIZE=2><B>  STOCKHOLDER COMMUNICATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Stockholders may send communications to the Board of Directors or to specified directors by mailing such communications to our Clerk at 22 East
Broadway, Gardner, Massachusetts 01440. All such correspondence should identify the author as a stockholder and clearly state whether the intended recipients are all members of the Board or only
specified directors. Any stockholder communication sent to the Board of Directors will be forwarded to the Board without screening. </FONT></P>

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NAME="di74501_stockholder_proposals"> </A>
<A NAME="toc_di74501_5"> </A>
<BR></FONT><FONT SIZE=2><B>  STOCKHOLDER PROPOSALS    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Stockholders may present proposals for inclusion in the 2010 proxy statement and form of proxy relating to that meeting provided they are received by
our Clerk no later than July&nbsp;4, 2010 and are otherwise in compliance with applicable Securities and Exchange Commission regulations. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>If
a stockholder who wishes to present a proposal at our 2010 annual meeting that will not be included in our proxy statement for such annual meeting fails to notify us of his or her desire to do so
by September&nbsp;16, 2010, then the proxies that the Board of Directors solicits for the 2010 annual meeting will include discretionary authority to vote on the stockholder's proposal, if such
proposal is properly brought before the meeting. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>18</FONT></P>

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<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_dr74501_1"> </A>
<BR></FONT><FONT SIZE=2><B>  APPENDIX A    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Charter
of the Audit Committee<BR>
of the<BR>
Board of Directors<BR>
of<BR>
Precision Optics Corporation,&nbsp;Inc. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Purpose.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the Audit Committee (the "Committee") shall be to (a)&nbsp;appoint, oversee and
replace, if necessary, the independent auditor, (b)&nbsp;assist the Board of Director's oversight of (i)&nbsp;the preparation of the Company's financial statements, (ii)&nbsp;the Company's
compliance with legal and regulatory requirements, (iii)&nbsp;the independent auditor's qualifications and independence, and (iv)&nbsp;the performance of the Company's internal audit function and
independent auditor; and (c)&nbsp;prepare the report the SEC rules require be included in the Company's annual proxy statement. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Composition of the Audit Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall consist of not less than three board members
appointed by the Board of Directors of the Company. Committee members may be removed by the Board of Directors in its discretion. Each member of the Committee shall satisfy the
independence requirements of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and The Nasdaq Stock Market,&nbsp;Inc. ("Nasdaq") as such requirements are interpreted by the Board of
Directors in its business judgment, and the Board of Directors shall annually review the Committee's compliance with such requirements. Members of the Committee shall be versed in reading and
understanding financial statements. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Meetings of the Audit Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall hold regularly scheduled meetings and such special
meetings as circumstances dictate. It shall meet separately, at least quarterly, with management, with the internal auditors (or other personnel responsible for the internal audit function), and with
the independent auditor to discuss results of examinations, or discuss any matters that the Committee or any of these persons or firms believe should be discussed privately. The Committee shall report
regularly to the Board of Directors. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Responsibilities of the Audit Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The function of the Committee is oversight. While the Committee has
the responsibilities set forth in this charter, it is not the responsibility of the Committee to plan or conduct audits, to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles, or to assure compliance with laws, regulations or any internal rules or policies of the Company. This is the responsibility of
management. The independent auditor is responsible for performing independent audits of the Company's consolidated financial statements in accordance with generally accepted auditing standards and for
issuing reports thereon. The Committee has direct and sole responsibility for the appointment, compensation, oversight and replacement, if necessary, of the independent auditor, including the
resolution of disagreements between management and the auditor regarding financial reporting. Each member of the Committee shall be entitled to rely on (i)&nbsp;the integrity of those persons and
organizations within and outside the Company that it receives information from and (ii)&nbsp;the accuracy of the financial and other information provided to the Committee by such persons or
organizations absent actual knowledge to the contrary (which shall be promptly reported to the Board of Directors). </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-1</FONT></P>

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<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Duties and Proceedings of the Audit Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall assist the Board of Directors in
fulfilling its oversight responsibilities by accomplishing the following: </FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Oversight of Independent Auditor.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Annually
evaluate, determine the selection of, and if necessary, determine the replacement of or rotation of, the independent auditor. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Approve
or pre-approve all auditing services (including comfort letters and statutory audits) and all permitted non-audit services by the
auditor. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Review,
evaluate and discuss formal reports, at least annually, from the independent auditor regarding the auditor's independence, including a delineation of all
relationships between the auditor and the Company; and recommend to the Board of Directors actions to satisfy the Board of the independence of the auditor. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Oversight of Audit Process and Company's Legal Compliance Program.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Review
and discuss with management, internal auditors and independent auditor the Company's system of internal control, its financial and critical accounting practices,
and policies relating to risk assessment and management. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Receive
and review reports of the independent auditor discussing 1)&nbsp;all critical accounting policies and practices used in the preparation of the Company's
financial statements, 2)&nbsp;all alternative treatments of financial information within generally accepted accounting principles ("GAAP") that have been discussed with management, ramifications of
the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor, and 3)&nbsp;other material written communications between the independent auditor and
management, such as any management letter or schedule of unadjusted differences. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Review
material pending legal proceedings involving the Company and other contingent liabilities. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Receive
from the CEO and CFO a report of all significant deficiencies and material weaknesses in the design or operation of internal controls, and any fraud that
involves management or other employees who have a significant role in the company's internal controls. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Discuss
with independent auditor the matters required to be communicated to audit committees in accordance with Statement on Auditing Standards No.&nbsp;61. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Establish
procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing
matters, and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or accounting matters. </FONT></P>

</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Responsibilities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Review
the adequacy of this audit committee charter annually and submit charter to Board of Directors for approval. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Prepare
report for inclusion in the Company's annual proxy statement as required by the rules of the Securities and Exchange Commission. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-2</FONT></P>

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<UL>
<UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Put
in place an appropriate control process for reviewing and approving Company's internal transactions and accounting. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Report
to the Board on a regular basis. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Annually
perform, or participate in, an evaluation of the performance of the Committee, the results of which shall be presented to the Board. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Perform
any other activities consistent with the Charter, By-laws and governing law as the Board of Directors or the Audit Committee shall deem appropriate,
including holding meetings with the Company's investment bankers and financial analysts. </FONT></P>

</UL>
</UL>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Authority and Resources of the Audit Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee has the authority to retain legal, accounting
or other experts that it determines to be necessary to carry out its duties. It also has authority to determine compensation for such advisors as well as for the independent auditor. The Committee may
determine appropriate funding needs for its own ordinary administrative expenses that are necessary and appropriate to carrying out its duties. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-3</FONT></P>

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<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><A
NAME="ma74501_appendix_b"> </A>
<A NAME="toc_ma74501_1"> </A>
<BR></FONT><FONT SIZE=2><B>  APPENDIX B    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B><I> PRECISION OPTICS CORPORATION,&nbsp;INC.<BR>
22 EAST BROADWAY<BR>
GARDNER, MA 01440-3338  </I></B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> VOTE BY MAIL  </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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 </FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="187pt" style="font-family:times;"></TD>
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<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2>TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>KEEP THIS PORTION FOR YOUR RECORDS</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>
- ------------------------------------------------------------------------------------------------------------------------------------------ </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>DETACH
AND RETURN THIS PORTION ONLY </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ma74501_this_proxy_card_is_valid_only_when_signed_and_dated."> </A>
<A NAME="toc_ma74501_2"> </A>
<BR></FONT><FONT SIZE=2><B>  THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>PRECISION OPTICS CORPORATION,&nbsp;INC.</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B> Vote on Director  </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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<TD WIDTH="21pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
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<TD WIDTH="81pt" style="font-family:times;"></TD>
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<TD style="font-family:times;"><FONT SIZE=2>1.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>The Board of Directors recommends a vote FOR the listed nominee as a Class&nbsp;I director to serve for a three-year term.</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> For</B></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Withhold</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2>01)</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT SIZE=2><B> Nominee: </B></FONT><FONT SIZE=2>Richard E. Forkey</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=3> <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT SIZE=3><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=3> <FONT FACE="WINGDINGS">&#111;</FONT><BR></FONT>
</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;text-align:justify"><FONT SIZE=2>For
address changes and/or comments, please check this box and write them on the back where indicated.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=3><FONT FACE="WINGDINGS">&#111;</FONT><BR></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Please sign this proxy exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney, administrator, trustee or guardian,
please give full title as such. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<P style="font-family:times;text-align:justify"><font size=1></FONT><FONT SIZE=2>


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</FONT> <FONT SIZE=2> Signature [PLEASE SIGN WITHIN BOX]</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2>


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</FONT> <FONT SIZE=2> Date</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2>


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</FONT> <FONT SIZE=2> Signature (Joint Owners)</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2>


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</FONT> <FONT SIZE=2> Date</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ma74501_precision_optics_corporation,_inc."> </A>
<A NAME="toc_ma74501_3"> </A>
<BR></FONT><FONT SIZE=2><B>  PRECISION OPTICS CORPORATION,&nbsp;INC.    <BR>    </B></FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Dear
Stockholder, </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Please
take note of the important information enclosed with this proxy card. The proposal which is discussed in detail in the enclosed proxy materials requires your immediate attention. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Your
vote counts, and you are strongly encouraged to exercise your right to vote the shares. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Please
mark the boxes on this proxy card to indicate how the shares should be voted. Then sign the card, detach it and return your proxy vote in the enclosed postage-paid envelope. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Your
vote must be received prior to the Annual Meeting of Stockholders on November&nbsp;24, 2009. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2>Thank
you in advance for your prompt consideration of these matters. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Very
truly yours, </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Precision
Optics Corporation,&nbsp;Inc. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ma74501_important_notice_regarding_the__imp03480"> </A>
<A NAME="toc_ma74501_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>The Notice and Proxy Statement and Annual Reprot are available at www.materials.proxvote.com/740294 </FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ma74501_precision_optics_corpo__ma702186"> </A>
<A NAME="toc_ma74501_5"> </A>
<BR></FONT><FONT SIZE=2><B>  PRECISION OPTICS CORPORATION,&nbsp;INC.<BR>  <BR>    COMMON STOCK PROXY    <BR>    </B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>The undersigned, revoking any previous instructions, hereby acknowledges receipt of the Notice and Proxy Statement dated October&nbsp;30, 2009. In
connection with the Annual Meeting mentioned below, the undersigned hereby appoints Joseph N. Forkey and Jack P. Dreimiller as Proxies of the undersigned each with power to act alone and with full
power of substitution, to act and to vote all shares of stock which the undersigned is entitled to vote at the Annual Meeting of Stockholders of Precision Optics Corporation,&nbsp;Inc. to be held on
November&nbsp;24, 2009 at 10:00&nbsp;A.M. at the Colonial Hotel, 625 Betty Spring Road, Gardner, Massachusetts, 01440, and at any adjournments or postponements thereof, upon the matters set forth
in the Proxy Statement for such Annual Meeting. The foregoing Proxies are authorized to vote, in their discretion, upon such other business as may properly come before the meeting or any adjournments
or postponements thereof. </FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>This proxy is solicited by the Board of Directors. When this proxy is properly executed, the shares represented hereby will be voted as specified by the Stockholder(s). If no
direction is given, the shares will be voted FOR the election of the Class&nbsp;I director nominee as described in Proposal Number&nbsp;1.</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.</B></FONT></P>

<P style="font-family:times;text-align:justify"><FONT SIZE=2>Please
sign exactly as your name appears on the books of Precision Optics Corporation,&nbsp;Inc. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity
in which they sign, and where more than one name appears, a majority must sign. If a corporation, this signature should be that of an authorized officer who should state his or her title. </FONT></P>


<P style="font-family:times;text-align:justify"><FONT SIZE=2><B>Address Changes/Comments:</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) </FONT></P>

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<BR>
<P><br><A NAME="09ZDY74501_1">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_be74501_1">NOTICE OF 2009 ANNUAL MEETING OF STOCKHOLDERS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_da74501_1">PROXY STATEMENT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_da74501_2">INFORMATION CONCERNING SOLICITATION AND VOTING</A></FONT><BR>
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<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dc74501_1">PROPOSAL 1: ELECTION OF DIRECTOR</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dc74501_2">OTHER MATTERS</A></FONT><BR>
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<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de74501_1">EXECUTIVE OFFICERS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de74501_2">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de74501_3">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de74501_4">EXECUTIVE AND DIRECTOR COMPENSATION</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de74501_5">Summary Compensation Table for the Fiscal Years Ended June 30, 2009 and 2008</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de74501_6">Outstanding Equity Awards at Fiscal Year-End Table for the Fiscal Year Ended June 30, 2009 Option awards</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de74501_7">Director Compensation Table for the Fiscal Year Ended June 30, 2009</A></FONT><BR>
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<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dg74501_1">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS</A></FONT><BR>
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<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di74501_1">INDEPENDENT PUBLIC ACCOUNTANTS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di74501_2">AUDIT COMMITTEE REPORT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di74501_3">CORPORATE CODE OF ETHICS AND CONDUCT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di74501_4">STOCKHOLDER COMMUNICATIONS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di74501_5">STOCKHOLDER PROPOSALS</A></FONT><BR>

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<UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dr74501_1">APPENDIX A</A></FONT><BR>
</UL>
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<UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ma74501_1">APPENDIX B</A></FONT><BR>
</UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ma74501_2">THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ma74501_3">PRECISION OPTICS CORPORATION, INC.</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ma74501_4">Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ma74501_5">PRECISION OPTICS CORPORATION, INC. COMMON STOCK PROXY</A></FONT><BR>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
