NOTES RECEIVABLE

3 Months Ended

Mar. 31, 2013

NOTE 5. NOTES RECEIVABLE

On June 27, 2012, we entered into a Securities Purchase Agreement related to our issuance of a $2,210,000 Secured Convertible Note (the "June 2012 Note"), with Inter-Mountain Capital Corp., a Delaware corporation ("Inter-Mountain"). As part of the June 2012 Note transaction, we received $1,500,000 in the form of six promissory notes in favor of the Company, each in the principal amount of $250,000 (the "Investor Notes") and each of which becomes due as the outstanding balance under the June 2012 Note is reduced to certain levels. On October 5, 2012, we and Inter-Mountain entered into a First Amendment to Buyer Trust Deed Note #1 (the "Trust Deed Note Amendment") for the purpose of revising certain terms and conditions contained in the Buyer Trust Deed Note #1, to include receiving payments of $100,000, $100,000, and $50,000 on October 5, 2012, November 30, 2012, and December 31, 2012, respectively, and any interest thereon.

As of March 31, 2013, we had $1,061,776 in notes receivable which is comprised of $1,000,000 for four Investor Notes and $61,776 for accrued interest thereon.

Please refer to Note 11 for a more detailed description of the June 2012 Note transaction.