STOCKHOLDERS' EQUITY (Tables)

6 Months Ended

Jun. 30, 2013

Warrants outstanding and number of shares of common stock subject to exercise

The following table summarizes the warrants outstanding and the number of shares of common stock subject to exercise as of June 30, 2013 and the changes therein during the six 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 June 30, 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.

Expiration dates for warrants subject to exercise

Of the warrant shares subject to exercise as of June 30, 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

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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