EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2012

Common shares excluded from calculating basic and diluted net loss per common share

Shares used in calculating basic and diluted net loss per common share exclude these potential common shares as of June 30, 2012 and December 31, 2011:

	June 30, 2012	December 31, 2011
Warrants to purchase common stock (1)	1,398,308	612,594
Stock options to purchase common stock	254,411	287,745
Unvested restricted common stock	397	1,096
Common stock issuable upon the assumed conversion of our convertible notes payable from June 2011 and July 2011 (2)	232,408	232,408
Common stock issuable upon the assumed conversion of our convertible note payable from June 2012 (3)	6,314,286	-
Common stock issuable upon the assumed conversion of our convertible preferred stock	928,572	357,143
Total	9,128,382	1,490,986

(1)

As part of the June 2012 Note, Inter-Mountain received a total of seven warrants to purchase, if they all vest, an aggregate of 3,142,857 shares of common stock, which number of shares could increase based upon the terms and conditions of the warrants. The warrants have an exercise price of $0.35 per share, subject to certain pricing adjustments, and are exercisable, subject to vesting provisions and ownership limitations, until June 27, 2017. The initial warrant for 785,714 shares of common stock vested on June 27, 2012 and only such shares of common stock have been included in this Table, based upon an exercise price of $0.35 per share of common stock. Each of the other warrants vest upon the payment by Inter-Mountain of each of the six Investor Notes.

(2)	The outstanding principal balance of the June 2011 Note and the July 2011 Note may be converted, at the option of Mr. Gray, into shares of common stock at a fixed conversion price of $1.20 per share and $1.08 per shares, respectively.

(3)

The outstanding principal balance of the June 2012 Note may be converted, at the option of Inter-Mountain, into shares of common stock at a conversion price of $0.35 per share, subject to certain pricing adjustments and ownership limitations. For the purposes of this Table, we have assumed a conversion price of $0.35 per share.