| Nevada                                                         |                                                                   | 98-0669413                                             |
|----------------------------------------------------------------|------------------------------------------------------------------------|--------------------------------------------------------|
| (State or other jurisdiction of incorporation or organization) |                                                                   | (Internal Revenue Service Employer Identification No.) |
|                                                           |  200 Queens Quay East, Unit #1, Toronto, Ontario, Canada, M5A 4K9 |                                                   |
|                                                           | (Address of Principal Executive Offices)                               |                                                   |
|                                                           |                                                                   |                                                   |
|                                                           | 416-362-2121                                                           |                                                   |
|                                                           | Registrant’s telephone number, including area code               |                                                   |
|                                                           |                                                                   |                                                   |

| Large accelerated filer | [   ] |   | Accelerated filer         | [     ] |   |   |
|-------------------------|----------------------|--------|---------------------------|----------------------------------|--------|--------|
| Non-accelerated filer   | [   ] |   | Smaller reporting company | [ X ]                            |   |   |

----

|       |                                                                                                                                       | PageNumber |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------|------------|
| PART I.    | FINANCIAL INFORMATION                                                                                                                      |       |
|       |                                                                                                                                       |       |
| Item 1     | Condensed Consolidated Financial Statements:                                                                                               |       |
|       | Condensed Consolidated Balance Sheets as of  December 31, 2010  and June 30, 2010 (Unaudited)                          | 3          |
|       | Condensed Consolidated Statements of Operations for the Six and Three Months Ended December 31, 2010 and 2009 (Unaudited)                  | 4          |
|       | Condensed Consolidated Statement of Changes in Shareholders’ Equity (Deficit) for the Six Months Ended December 31, 2010 (Unaudited) | 5          |
|       | Condensed Consolidated Statements of Cash Flows for the Six and Three Months Ended December 30, 2010 and 2009 (Unaudited)                  | 6          |
|       | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                           | 7          |
| Item 2     | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                      | 15         |
| Item 3     | Quantitative and Qualitative Disclosures About Market Risk                                                                                 | 18         |
| Item 4     | Controls and Procedures                                                                                                                    | 18         |
|       |                                                                                                                                       |       |
| PART II    | OTHER INFORMATION                                                                                                                          |       |
|       |                                                                                                                                       |       |
| Item 1     | Legal Proceedings                                                                                                                          | 19         |
| Item 1A    | Risk Factors                                                                                                                               | 19         |
| Item 2     | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                | 19         |
| Item 3     | Defaults upon Senior Securities                                                                                                            | 19         |
| Item 4     | Removed and Reserved                                                                                                                       | 19         |
| Item 5     | Other Information                                                                                                                          | 19         |
| Item 6     | Exhibits                                                                                                                                   | 20         |
|       |                                                                                                                                       |       |
| SIGNATURES | 22                                                                                                                                         |
|       |                                                                                                                                       |       |
| EXHIBITS   |                                                                                                                                       |
|       |                                                                                                                                       |       |

----

|                                                                                                                                                                                    | December 31, 2010 |   | June 30, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|--------|---------------|--------|
|   - ASSETS -                                                                                                                                                                  |              |   |          |   |
|                                                                                                                                                                                    |              |   |          |   |
| CURRENT ASSETS:                                                                                                                                                                         |              |   |          |   |
|  Cash and cash equivalents (includes restricted cash of $80,172 Note 13)                                                                                                           |              | $      | 748,539       |   |   | $ | 513,035 |   |
|  Short-term investments                                                                                                                                                            |              |   | -             |   |   |   | 251,659 |   |
|  Accounts receivable - net of allowance for doubtful accounts of $27,687                                                                                                           |              |   | 433,984       |   |   |   | 789,920 |   |
|  Accrued receivable                                                                                                                                                                |              |   | -             |   |   |   | 554,143 |   |
|  Inventories, net                                                                                                                                                                  |              |   | 903,544       |   |   |   | 919,158 |   |
|  Prepaid expenses and other current assets                                                                                                                                         |              |   | 175,365       |   |   |   | 625,143 |   |
| TOTAL CURRENT ASSETS                                                                                                                                                                    |              |   | 2,261,432     |   |   |   | 3,653,058 |   |
| INTANGIBLE ASSET SUBJECT TO AMORTIZATION,  NET                                                                                                                                |              |   | 3,140,943     |   |   |   | 3,533,029 |   |
| FIXED ASSETS, NET                                                                                                                                                                       |              |   | 50,594        |   |   |   | 60,900 |   |
| TOTAL ASSETS                                                                                                                                                                            |              | $      | 5,452,969     |   |   | $ | 7,246,987 |   |
|                                                                                                                                                                                    |
| - LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) -                                                                                                                                |
|                                                                                                                                                                                    |              |   |          |   |   |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                                                    |              |   |          |   |   |   |   |   |
|  Accounts payable                                                                                                                                                                  |              | $      | 880,908       |   |   | $ | 681,394 |   |
|  Royalty payable                                                                                                                                                                   |              |   | 1,285,587     |   |   |   | 1,139,776 |   |
|  Accrued expenses                                                                                                                                                                  |              |   | 1,114,935     |   |   |   | 688,996 |   |
|  Accrued expenses – related parties                                                                                                                                          |              |   | 1,451,992     |   |   |   | - |   |
|  Deferred revenue                                                                                                                                                                  |              |   | 207,803       |   |   |   | 7,781 |   |
|  Dividends payable                                                                                                                                                                 |              |   | 60,000        |   |   |   | 60,000 |   |
|  Loan payable – shareholder                                                                                                                                                  |              |   | -             |   |   |   | 350,000 |   |
|  Due to Zeroloft Corp.                                                                                                                                                             |              |   | 277,880       |   |   |   | 850,000 |   |
| TOTAL CURRENT LIABILITIES                                                                                                                                                               |              |   | 5,279,105     |   |   |   | 3,777,947 |   |
|                                                                                                                                                                                    |              |   |          |   |   |   |   |   |
| LONG-TERM LIABILITIES:                                                                                                                                                                  |              |   |          |   |   |   |   |   |
|  Accrued expenses                                                                                                                                                                  |              |   | -             |   |   |   | 428,505 |   |
|  Accrued expenses – related parties                                                                                                                                          |              |   | -             |   |   |   | 1,394,932 |   |
|  Accounts payable – related parties                                                                                                                                          |              |   | 242,076       |   |   |   | 242,076 |   |
|  Loans and advances – officer/shareholder                                                                                                                                    |              |   | 158,738       |   |   |   | 158,738 |   |
| TOTAL LONG-TERM LIABILITIES                                                                                                                                                             |              |   | 400,814       |   |   |   | 2,224,251 |   |
|                                                                                                                                                                                    |              |   |          |   |   |   |   |   |
| SHAREHOLDERS’ EQUITY (DEFICIT):                                                                                                                                                   |              |   |          |   |   |   |   |   |
| Preferred stock, $0.10 par value, authorized undesignated 2,447,000 shares, no shares    issued and outstanding                                                     |              |   | -             |   |   |   | - |   |
| Series A Convertible Preferred stock, $0.001 par value, authorized 2,200,000 shares, 2,113,556 shares issued and outstanding as of December 31, 2010 and June 30, 2010                  |              |   | 2,114         |   |   |   | 2,114 |   |
| Series B Convertible Preferred stock, $0.10 par value, authorized 353,000 shares, 352,945 shares  issued and outstanding as of  December 31, 2010 and June 30, 2010 |              |   | 35,295        |   |   |   | 35,295 |   |
| Common stock, $0.001 par value; 300,000,000 shares authorized, 23,895,500 and 21,877,608 issued and outstanding at December 31, 2010 and June 30, 2010, respectively                    |              |   | 23,896        |   |   |   | 21,878 |   |
| Additional paid-in capital                                                                                                                                                              |              |   | 32,929,728    |   |   |   | 32,424,471 |   |
| Accumulated deficit                                                                                                                                                                     |              |   | (33,217,983   | )      |   |   | (31,238,969 | ) |
| TOTAL SHAREHOLDERS’  EQUITY (DEFICIT)                                                                                                                                   |              |   | (226,950      | )      |   |   | 1,244,789 |   |
|                                                                                                                                                                                    |              |   |          |   |   |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)                                                                                                                              |              | $      | 5,452,969     |   |   | $ | 7,246,987 |   |

----

|                                                                  |   | Six months Ended December 31, |       |   | Three months Ended December 31, |   |
|-----------------------------------------------------------------------|--------|-------------------------------|------------|--------|---------------------------------|--------|
|                                                                  |   | 2010                          |       |   | 2009                            |   |   | 2010 |   |   | 2009 |   |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |
| REVENUES                                                              |   | $                             | 1,742,902  |   |                            | $      | 1,660,453 |   |   | $ | 1,091, 999 |   |   | $ | 901,635 |   |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| COSTS OF SALES                                                        |   |                          | 897,853    |   |                            |   | 867,380 |   |   |   | 471,874 |   |   |   | 442,915 |   |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| GROSS PROFIT                                                          |   |                          | 845,049    |   |                            |   | 793,073 |   |   |   | 620,125 |   |   |   | 458,720 |   |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| GENERAL AND  ADMINISTRATIVEEXPENSES                         |   |                          | 2,700,030  |   |                            |   | 2,048,045 |   |   |   | 1,528, 847 |   |   |   | 1,212,804 |   |
| LOSS FROM OPERATIONS                                                  |   |                          | (1,854,981 | )      |                            |   | (1,254,972 | ) |   |   | (908,722 | ) |   |   | (754,084 | ) |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                                                |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|   Interest income                                           |   |                          | 296        |   |                            |   | 775 |   |   |   | 72 |   |   |   | 473 |   |
|   Interest expense                                          |   |                          | (4.329     | )      |                            |   | (106,804 | ) |   |   | (493 | ) |   |   | (15,975 | ) |
|                                                                  |   |                          | (4,033     | )      |                            |   | (106,029 | ) |   |   | (421 | ) |   |   | (15,502 | ) |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| LOSS BEFORE PROVISION FOR INCOME TAXES                                |   |                          | (1,859,014 | )      |                            |   | (1,361,001 | ) |   |   | (909,143 | ) |   |   | (769,586 | ) |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|  Provision for income taxes                                      |   |                          | -          |   |                            |   | - |   |   |   | - |   |   |   | - |   |
| NET LOSS                                                              |   |                          | (1,859,014 | )      |                            |   | (1,361,001 | ) |   |   | (909,143 | ) |   |   | (769,586 | ) |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Dividends on Series B Preferred Convertible stock                     |   |                          | (120,000   | )      |                            |   | (120,000 | ) |   |   | (60,000 | ) |   |   | (60,000 | ) |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS AVAILABLE TO COMMON STOCKHOLDERS                             |   | $                             | (1,979,014 | )      |                            | $      | (1,481,001 | ) |   | $ | (969,143 | ) |   | $ | (829,586 | ) |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net loss per share available to common stockholders |   | $                             | (0.09      | )      |                            | $      | (0.12 | ) |   | $ | (0.04 | ) |   | $ | (0.06 | ) |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding                 |   |                          | 22,789,636 |   |                            |   | 12,106,889 |   |   |   | 23,309,561 |   |   |   | 12,937,354 |   |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                          |       |   |                            |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                    |   | Series A Convertible Preferred Stock |   |   | Series B Convertible Preferred Stock |   |   | Number of Issued and Outstanding Common Stock |   |   | Common Stock |   |   | Additional Paid-In Capital |   |   | Accumulated Deficit |   |       | Total Shareholders’ Equity (Deficit) |   |
|-------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------|--------|--------|----------------------------|--------|--------|---------------------|--------|------------|--------------------------------------------|--------|
| Balance June 30, 2010                                                   |   | $                                    | 2,114  |   |                                 | $      | 35,295 |                                          |   |   | 21,877,608        |   |   | $                          | 21,878 |   |                | $      | 32,424,471 |                                       |   | $ | (31,238,969 | ) |   | $ | 1,244,789 |   |
| Issuance of common stock for services                                   |   |                                 | -      |   |                                 |   | -      |                                          |   |   | 1,467,066         |   |   |                       | 1,467  |   |                |   | 349,412    |                                       |   |   | - |   |   |   | 350,879 |   |
| Issuance of stock warrants for services                                 |   |                                 | -      |   |                                 |   | -      |                                          |   |   | -                 |   |   |                       | -      |   |                |   | 36,286     |                                       |   |   | - |   |   |   | 36,286 |   |
| Exercise of warrants                                                    |   |                                 | -      |   |                                 |   | -      |                                          |   |   | 110,000           |   |   |                       | 110    |   |                |   | -          |                                       |   |   | - |   |   |   | 110 |   |
| Dividends on Series B Convertible Preferred stock, paid in common stock |   |                                 | -      |   |                                 |   | -      |                                          |   |   | 440,826           |   |   |                       | 441    |   |                |   | 119,559    |                                       |   |   | (120,000 | ) |   |   | - |   |
| Net loss                                                                |   |                                 | -      |   |                                 |   | -      |                                          |   |   | -                 |   |   |                       | -      |   |                |   | -          |                                       |   |   | (1,859,014 | ) |   |   | (1,859,014 | ) |
| Balance December 31,  2010                                    |   | $                                    | 2,114  |   |                                 | $      | 35,295 |                                          |   |   | 23,895,500        |   |   | $                          | 23,896 |   |                | $      | 32,929,728 |                                       |   | $ | (33,217.983 | ) |   | $ | (226,950 | ) |
|                                                                    |   |                                 |   |   |                                 |   |   |                                          |   |   |              |   |   |                       |   |   |                |   |       |                                       |   |   |   |   |   |   |   |   |
|                                                                    |   |                                 |   |   |                                 |   |   |                                          |   |   |              |   |   |                       |   |   |                |   |       |                                       |   |   |   |   |   |   |   |   |

| See notes to condensed consolidated financial statements |
|----------------------------------------------------------|

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|                                                                                                                           |   | 2010   |       |   | 2009   |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                          |   |   |       |   |   |   |
| Net loss                                                                                                                       |   | $      | (1,859,014 | )      |   | $      | (1,361,001 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                                      |   |   |       |   |   |   |   |   |
| Compensatory common stock and warrants                                                                                         |   |   | 387,165    |   |   |   | 1,077,313 |   |
| Depreciation                                                                                                                   |   |   | 10,306     |   |   |   | 19,862 |   |
| Amortization of intangible asset                                                                                               |   |   | 392,086    |   |   |   | - |   |
| Amortization of debt discount                                                                                                  |   |   | -          |   |   |   | 70,454 |   |
| Non-cash foreign exchange                                                                                                      |   |   | -          |   |   |   | 2,105 |   |
| Accrued interest                                                                                                               |   |   | (216       | )      |   |   | (730 | ) |
| Changes in:                                                                                                                    |   |   |       |   |   |   |   |   |
| Accounts receivable                                                                                                            |   |   | 355,936    |   |   |   | (115,221 | ) |
| Inventories                                                                                                                    |   |   | 15,614     |   |   |   | (238,214 | ) |
| Prepaid expenses and other current assets                                                                                      |   |   | 449,778    |   |   |   | (177,452 | ) |
| Accounts payable, accrued expenses and royalty payable                                                                         |   |   | 399,819    |   |   |   | 220,740 |   |
| Deferred revenue                                                                                                               |   |   | 311,253    |   |   |   | (24,000 | ) |
| Due to Zeroloft Corp.                                                                                                          |   |   | (129,208   | )      |   |   | - |   |
| Net cash provided by (used in) operating activities                                                                            |   |   | 333,519    |   |   |   | (526,144 | ) |
|                                                                                                                           |   |   |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                          |   |   |       |   |   |   |   |   |
| Proceeds from (purchase of) short-term investments                                                                             |   |   | 251,875    |   |   |   | (250,000 | ) |
|  Net cash provided by (used in) investing activities                                                                      |   |   | 251,875    |   |   |   | (250,000 | ) |
|                                                                                                                           |   |   |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                          |   |   |       |   |   |   |   |   |
| Repayment of loan payable - shareholder                                                                                        |   |   | (350,000   | )      |   |   | (150,000 | ) |
| Issuance of Series B Convertible Preferred Stock                                                                               |   |   | -          |   |   |   | 51 |   |
| Exercise of warrants                                                                                                           |   |   | 110        |   |   |   | 5,000 |   |
|  Net cash used in financing activities                                                                                    |   |   | (349,890   | )      |   |   | (144,949 | ) |
|                                                                                                                           |   |   |       |   |   |   |   |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                               |   |   | 235,504    |   |   |   | (921,093 | ) |
|                                                                                                                           |   |   |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                                                 |   |   | 513,035    |   |   |   | 1,048,402 |   |
|                                                                                                                           |   |   |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                                                                       |   | $      | 748,539    |   |   | $      | 127,309 |   |
|                                                                                                                           |   |   |       |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION:                                                                                            |   |   |       |   |   |   |   |   |
| Interest paid                                                                                                                  |   | $      | -          |   |   | $      | - |   |
| Income taxes paid                                                                                                              |   | $      | -          |   |   | $      | - |   |
| Issuance of shares of common stock for dividends                                                                          |   | $      | 120,000    |   |   | $      | 917,678 |   |
| Repayment of amount due to Zeroloft Corp. through application of receivable from Zeroloft Corp. for certain reimbursable costs |   | $      | 442,912    |   |   | $      | - |   |
|                                                                                                                           |   |   |       |   |   |   |   |   |

----

----

|                             |   | December 31, 2010 |      |   | June 30, 2010 |   |
|----------------------------------|--------|-------------------|-----------|--------|---------------|--------|
| Finished goods                   |   | $                 | 1,224,177 |   |          | $      | 1,238,370 |   |
| Components                       |   |              | 221,562   |   |          |   | 222,983 |   |
| Less: Provision for obsolescence |   |              | (542,195  | )      |          |   | (542,195 | ) |
| Total                            |   | $                 | 903,544   |   |          | $      | 919,158 |   |

----

|                     |   | As at and for the six months endedDecember 31,2010 |        |   | As at and for the year ended June 30,2010 |   |
|--------------------------|--------|----------------------------------------------------|-------------|--------|-------------------------------------------|--------|
| Negative working capital |   | $                                                  | (3,017,673  | )      |                                      | $      | (124,889 | ) |
| Net loss                 |   | $                                                  | (1,859,014  | )      |                                      | $      | (4,477,564 | ) |
| Accumulated deficit      |   | $                                                  | (33,217,983 | )      |                                      | $      | (31,238,969 | ) |

----

----

|                        |   | December 31, 2010 |      |   | December 31, 2009 |   |
|-----------------------------|--------|-------------------|-----------|--------|-------------------|--------|
| Warrants                    |   |              | 2,750,000 |   |              |   | 2,435,143 |   |
| Convertible Preferred stock |   |              | 2,380,326 |   |              |   | 2,380,326 |   |
| Due to Related Party        |   |              | 3,747,590 |   |              |   | 3,747,590 |   |
|                        |   |              |      |   |              |   |   |   |

----

|                                                  |   | Number of Options |    |   | Weighted Average ExercisePrice Per Share |   |
|-------------------------------------------------------|--------|-------------------|---------|--------|------------------------------------------|--------|
| Outstanding – July 1, 2009                      |   |              | 160     |   |                                     | $      | 18.75 |   |
| Granted                                               |   |              | 425,000 |   |                                     |   | 0.50 |   |
| Forfeited or expired                                  |   |              | (80     | )      |                                     |   | 12.50 |   |
| Exercised                                             |   |              | -       |   |                                     |   | - |   |
| Outstanding  - June 30, 2010                |   |              | 425,080 |   |                                     | $      | 0.50 |   |
| Granted                                               |   |              | -       |   |                                     |   | - |   |
| Forfeited or expired                                  |   |              | (80     | )      |                                     |   | 12.50 |   |
| Exercised                                             |   |              | -       |   |                                     |   | - |   |
| Outstanding and exercisable – December 31, 2010 |   |              | 425,000 |   |                                     | $      | 0.50 |   |

| Exercise Price |   |   | Number Outstanding at December 31, 2010 |   |    | Average Remaining Life (Years) |   |   | AggregateAggregate Intrinsic Value |   |
|----------------|--------|--------|-----------------------------------------|--------|---------|--------------------------------|--------|--------|------------------------------------|--------|
| $              | 0.50   |   |                                    |   | 425,000 |                           |   |   | 1.38                               |   |   |   | - |   |

----

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|   |   |
|--------|--------|

| ITEM 2 | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|--------|---------------------------------------------------------------------------------------|

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| Exhibit No. |   | Exhibit Description                                                                                                                                                                                                                              |
|------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3(i)(1)          |   | Amended Certificate of Incorporation of the Company, incorporated herein by reference to the Company’s   Registration Statement on Form S-1, as amended, File No. 33-43976 filed on November 14, 1991.                                |
|             |   |                                                                                                                                                                                                                                             |
| 3(i)(2)          |   | Certificate of Amendment to Amended Certificate of Incorporation of the Company, incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K dated May 12, 2006.                                                             |
|             |   |                                                                                                                                                                                                                                             |
| 3(i)(3)          |   | Certificate of the Powers, Designations, Preferences and Rights of the Series A Convertible Preferred Stock, $0.10 par value per share, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K dated February 24, 2006. |
|             |   |                                                                                                                                                                                                                                             |
| 3(i)(4)          |   | Certificate of the Powers, Designations, Preferences and Rights of the Series B Convertible Preferred Stock, $0.10 par value per share, incorporated herein by reference to Exhibit 3(i) to the Company’s Form 8-K dated August 3, 2006.   |

| 3(i)(5)  |   | Certificate of the Powers, Designations, Preferences and Rights of the Series B Convertible Preferred Stock, $0.10 par value per share, incorporated herein by reference to Exhibit 3(i) to the Company’s Form 8-K dated June 18, 2007.                                               |
|----------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |   |                                                                                                                                                                                                                                                                                        |
| 3(i)(6)  |   | Amended and Restated Certificate of the Powers, Designations, Preferences and Rights of the Series B Convertible Preferred Stock, $0.10 par value per share, dated July 10, 2009, incorporated herein by reference to Exhibit 4.12 to the Company’s Form 8-K filed on August 3, 2009. |
|     |   |                                                                                                                                                                                                                                                                                        |
| 3(ii)(1) |   | Amended and Restated Bylaws of the Company, incorporated herein by reference to the Company’s   Registration Statement on Form S-1, as amended, File No. 33-43976 filed on November 14, 1991.                                                                               |
|     |   |                                                                                                                                                                                                                                                                                        |
| 3(ii)(2) |   | Certificate of Amendment to the Certificate of Incorporation of the Company to effectuate a 1 for 20 reverse stock split of the Company’s issued and outstanding shares of common stock, incorporated herein by reference to the Company’s  Form 8-K dated April 24, 2008. |
|     |   |                                                                                                                                                                                                                                                                                        |
| 3(iii)   |   | Audit Committee Charter, incorporated by reference to Exhibit 3(iii) to the Company’s Form 10-K, filed on September 24, 2010.                                                                                                                                                         |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.1      |   | Form of Element 21 Golf Company 10% Convertible Promissory Note, incorporated herein by reference to Exhibit 4.2 to the Company’s Form 8-K dated February 24, 2006.                                                                                                                   |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.2      |   | Element 21 Golf Company 10% Convertible Promissory Note issued to Oleg Muzyrya, incorporated herein by reference to Exhibit 4.3 to the Company’s Form 8-K dated February 24, 2006.                                                                                                    |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.3      |   | Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.4 to the Company’s Form 8-K dated February 24, 2006.                                                                                                                                                     |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.4      |   | Form of Element 21 Golf Company 10% Convertible Promissory Note, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K dated May 23, 2006.                                                                                                                        |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.5      |   | Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.2 to the Company’s Form 8-K dated May 23, 2006.                                                                                                                                                          |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.6      |   | Form of Warrant for Purchase of 3,750,000 Shares of Common Stock dated July 31, 2006, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K dated August 3, 2006.                                                                                                 |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.7      |   | Form of Warrant for Purchase of 5,073,530 Shares of Common Stock dated July 31, 2006, incorporated herein by reference to Exhibit 4.2 to the Company’s Form 8-K dated August 3, 2006.                                                                                                 |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.8      |   | Form of Warrant for Purchase of 3,750,000 Shares of Common Stock dated July 31, 2006, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K dated December 1, 2006.                                                                                               |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.9      |   | Form of Warrant for Purchase of 5,073,530 Shares of Common Stock dated July 31, 2006, incorporated herein by reference to Exhibit 4.2 to the Company’s Form 8-K dated December 1, 2006.                                                                                               |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.10     |   | Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K dated June 18, 2006.                                                                                                                                                         |
|     |   |                                                                                                                                                                                                                                                                                        |
| 4.11     |   | Form of Warrant for Purchase of 5,882,400 Shares of Common Stock dated June 15, 2007, incorporated herein by reference to Exhibit 4.2 to the Company’s Form 8-K dated June 18, 2007.                                                                                                  |

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| 10.1        |   | Series A Convertible Preferred Stock Exchange Agreement and Acknowledgement dated as of February 22, 2006, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated February 24, 2006.            |
|-------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                            |
| 10.2        |   | Element 21 Golf Company 2006 Equity Incentive Plan, incorporated herein by reference to Annex C to the Company’s Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 filed on April 7, 2006. |
|        |   |                                                                                                                                                                                                                            |
| 10.3        |   | Form of Subscription Agreement for Shares of Series B Convertible Preferred Stock dated as of July 31, 2006, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated August 3, 2006.             |
|        |   |                                                                                                                                                                                                                            |
| 10.4        |   | Form of Subscription Agreement for Shares of Series B Convertible Preferred Stock dated as of November 30, 2006, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated August 3, 2006.         |
|        |   |                                                                                                                                                                                                                            |
| 10.5        |   | Form of Subscription Agreement for Shares of Series B Convertible Preferred Stock dated as of June 15, 2007, incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K dated June 18, 2007.              |
|        |   |                                                                                                                                                                                                                            |
| 10.6        |   | Form of Subscription Agreement for Shares of Common Stock dated as of June, 2007, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated June 18, 2007                                          |
|        |   |                                                                                                                                                                                                                            |
| 10.7        |   | License Agreement with Advanced Light Alloys Corporation dated as of June 21, 2007 incorporated by reference to exhibit 10.1 to the Company’s Form 10K dated June 21, 2007.                                               |
|        |   |                                                                                                                                                                                                                            |
| 10.8        |   | Consulting Agreement with Nataliya Hearn dated as of January 4, 2006 incorporated by reference to exhibit 10.4 to the Company’s Form 10K dated October 13, 2006.                                                          |
|        |   |                                                                                                                                                                                                                            |
| 10.9        |   | Consulting Agreement with John Grippo dated as of November 10, 2005 incorporated by reference to exhibit 10.5 to the Company’s Form 10K dated October 13, 2006.                                                           |
|        |   |                                                                                                                                                                                                                            |
| 10.10       |   | Extension and Modification of Promissory Note, incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on April 22, 2009.                                                                 |
|        |   |                                                                                                                                                                                                                            |
| 10.11  |   | Investment Banking Agreement with Legend Securities, Inc., incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on December 15, 2009.                                                                      |
|        |   |                                                                                                                                                                                                                            |
| 10.12       |   | Trademark License and Product Distribution Agreement, incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on January 20, 2010.                                                                            |
|        |   |                                                                                                                                                                                                                            |
| 10.13       |   | Management Agreement with Zeroloft Corp., incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on January 20, 2009                                                                                    |
|        |   |                                                                                                                                                                                                                            |
| 10.14  |   | Consulting Agreement with Gaynell Douglas dated May 1, 2010, incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K/A, filed on October 15, 2010.                                                          |
|        |   |                                                                                                                                                                                                                            |
| 10.15  |   | Consulting Agreement with Yell Services, dated October 1, 2009, incorporated by reference to Exhibit 10.15 to the Company’s Form 10-K/A, filed on October 15, 2010.                                                       |
|        |   |                                                                                                                                                                                                                            |
| 10.16  |   | Consulting Agreement with Altaf Kassam, dated October 1, 2009, incorporated by reference to Exhibit 10.16 to the Company’s Form 10-K/A, filed on October 15, 2010.                                                        |
|        |   |                                                                                                                                                                                                                            |
| 10.17       |   | Consulting Agreement with Tolkun Salieva, dated October 1, 2009, incorporated by reference to Exhibit 10.17 to the Company’s Form 10-K/A, filed on October 15, 2010.                                                      |
|        |   |                                                                                                                                                                                                                            |
| 10.18       |   | Consulting Agreement with Charles E. Fitzgerald, dated May 1, 2010, incorporated by reference to Exhibit 10.18 to the Company’s Form 10-K/A, filed on October 15, 2010.                                                   |
|        |   |                                                                                                                                                                                                                            |
| 10.19       |   | Employment Agreement with Nataliya Hearn, Ph.D., dated January 1, 2009, incorporated by reference to Exhibit 10.19 to the Company’s Form 10-K/A, filed on October 15, 2010.                                               |
|        |   |                                                                                                                                                                                                                            |
| 10.20       |   | Consulting Agreement with Dorset Solutions, Inc, dated November 19, 2009, incorporated by reference to Exhibit 10.20 to the Company’s Form 10-K/A, filed on October 15, 2010.                                             |
|        |   |                                                                                                                                                                                                                            |
| 10.21       |   | Consulting Agreement with Dorset Solutions, Inc, dated January 1, 2010, incorporated by reference to Exhibit 10.20 to the Company’s Form 10-K/A, filed on October 15, 2010.                                               |
|        |   |                                                                                                                                                                                                                            |
| 10.22       |   | Consulting Agreement with Yell Services, dated October 1, 2010.++                                                                                                                                                               |
|        |   |                                                                                                                                                                                                                            |
| 10.23       |   | Consulting Agreement with Altaf Kassam, dated October 1, 2010.++                                                                                                                                                                |
|        |   |                                                                                                                                                                                                                            |
| 10.24       |   | Consulting Agreement with Tolkun Salieva, dated October 1, 2010.++                                                                                                                                                              |
|        |   |                                                                                                                                                                                                                            |
| 10.25       |   | Consulting Agreement with Jeff Manore, dated October 20, 2010.++                                                                                                                                                                |
|        |   |                                                                                                                                                                                                                            |
| 10.26       |   | Constulting Agreement with Henry Waszczuk, dated October 21, 2010.++                                                                                                                                                            |
|        |   |                                                                                                                                                                                                                            |
| 14.1        |   | Code of Conduct and Ethics, incorporated by reference to Exhibit 14.1 to the Company’s Form 10-K, filed on September 24, 2010.                                                                                            |
|        |   |                                                                                                                                                                                                                            |
| 31.1        |   | Rule 13a-14(a)/15a-14(a) Certifications of Chief Executive Officer.++                                                                                                                                                           |
|        |   |                                                                                                                                                                                                                            |
| 31.2        |   | Rule 13a-14(a)/15a-14(a) Certifications of Chief Financial Officer.++                                                                                                                                                           |
|        |   |                                                                                                                                                                                                                            |
| 32.1        |   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.++                                                                            |
|        |   |                                                                                                                                                                                                                            |
| 32.2        |   | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.++                                                                            |

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|                    |                                              |                          |
|-------------------------|---------------------------------------------------|-------------------------------|
|                    | American Rare Earths and Materials, Corp.         |
|               |                                         |                     |
|  February 11, 2011 | By:                                               | /s/  Nataliya Hearn |
|                    | Nataliya Hearn, Ph.D.                             |
|                    | Chairman, Chief Executive Officer and President   |
|                    |                                              |                          |
|                    |                                              |
|               |                                         |                     |
|  February 11, 2011 | By:                                               | /s/ Philip Clark              |
|                    | Philip Clark, CA, CPA, CFAChief Financial Officer |