S&L had not yet converted warrants to obtain the shares at the time of the 10K filing.  They had to convert within 60 days of August 31, 2006.

Without going back into the filings, and IMVHO, I suspect that the 2 million share difference is roughly equivalent to the cost of purchasing those warrants (2MM x 0.015/warrant = $30,000).  I do recall clearly in the filings that they did not pay cash for the conversion.

Could be dead wrong though -- clarification/confirmation welcome.