STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2013

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 13.            STOCKHOLDERS' EQUITY

Common Stock

As of March 31, 2013, we had 12,218,322 shares of common stock issued and outstanding.  We issued 2,143,874 shares of common stock for the three months ended March 31, 2013 comprised of 300 shares of common stock issued for the vesting of certain restricted stock awards, 1,000,000 shares of common stock issued to IPMD pursuant to the January 2013 Offering, 220,000 shares of common stock issued to Messrs. Gray and Wallberg pursuant to the March 2013 Offering, and 923,574 shares of common stock issued for installment payments due on the June 2012 Note with Inter-Mountain.

Preferred Stock

As of March 31, 2013, we had 65 shares of Series A preferred stock issued and outstanding.  For the three months ended March 31, 2013, we did not issue any shares of Series A preferred stock to Ironridge Global pursuant to our agreement related to the purchase of the Series A preferred stock.

Warrants

The following table summarizes the warrants outstanding and the number of shares of common stock subject to exercise as of March 31, 2013 and the changes therein during the three months then ended:

	Number of Shares of Common Stock Subject to Exercise			Weighted – Average Exercise Price
Balance as of December 31, 2012		2,041,165		$	0.98
Warrants issued		4,052,857		$	0.58
Warrants exercised		---			---
Warrants cancelled		(250,000	)	$	0.35
Balance as of March 31, 2013 (1)		5,844,022		$	0.73

(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.  Warrants for 785,714, 392,857, and 392,857 shares of common stock vested on June 27, 2012, December 31, 2012, and February 26, 2013, respectively, and only such shares of common stock (1,571,428 shares) have been included in this Table, based upon an exercise price of $0.35 per share of common stock.  Each of the other four warrants vest upon the payment by Inter-Mountain of each of the four remaining Investor Notes.

For the three months ended March 31, 2013, we issued warrants to purchase up to an aggregate of 4,052,857 shares of our common stock which consisted of (i) a warrant issued to IPMD pursuant to the January 2013 Offering to purchase up to an aggregate of 3,000,000 shares of our common stock at an exercise price of $0.60 per share, (ii) a warrant issued to Kerry P. Gray pursuant to the March 2013 Offering to purchase up to an aggregate of 600,000 shares of our common stock at an exercise price of $0.60 per share, (iii) a warrant issued to Terrance K. Wallberg pursuant to the March 2013 Offering to purchase up to an aggregate of 60,000 shares of our common stock at an exercise price of $0.60 per share, (iv) a warrant issued to Inter-Mountain to purchase up to an aggregate of 392,857 shares of our common stock at an exercise price of $0.35 per share.  Also occurring during the three months ended March 31, 2013 was the cancellation of a warrant issued to NUWA Group LLC to purchase up to an aggregate of 250,000 shares of our common stock at an exercise price of $0.35 per share.

Of the warrant shares subject to exercise as of March 31, 2013, expiration of the right to exercise is as follows:

Date of Expiration	Number of Warrant Shares of Common Stock Subject to Expiration
January 3, 2014		3,000,000
July 23, 2014		69,050
May 15, 2015		357,155
June 13, 2016		35,000
July 16, 2016		116,667
July 28, 2016		34,722
June 27, 2017		1,571,428
March 14, 2018		660,000
Total		5,844,022