STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2013

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 13. STOCKHOLDERS' EQUITY

Common Stock

As of September 30, 2013, we had 16,693,883 shares of common stock issued and outstanding.  We issued 2,236,227 shares of common stock for the three months ended September 30, 2013 comprised of 150,000 shares of common stock issued for consulting services, 750,000 shares of common stock issued to IPMD pursuant to the January 2013 Offering, 275,000 shares of common stock issued to Messrs. Gray and Wallberg pursuant to the March 2013 Offering, 592,133 shares of common stock issued for installment payments due on the June 2012 Note with Inter-Mountain, and 469,094 shares of common stock issued for the cashless exercise of warrants held by Inter-Mountain.

Preferred Stock

As of September 30, 2013, we had no shares of Series A preferred stock issued and outstanding.  For the three months ended September 30, 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.

On August 15, 2013, we provided notice to Ironridge Global III, LLC ("Ironridge") for the redemption of all of our Series A Preferred Stock shares (the "Series A Shares") held by Ironridge, a total of 65 Series A Shares.  An affiliate of Ironridge, the issuer of promissory notes held by us, due 7.5 years from the issue date, in the principal amount of $969,000 (the "Notes"), agreed to accept the cancellation of the Notes held by us as full and final payment for the redemption amounts of the Series A Shares.

Warrants

The following table summarizes the warrants outstanding and the number of shares of common stock subject to exercise as of September 30, 2013 and the changes therein during the nine 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		4,445,714		$	0.56
Warrants exercised		(479,459	)	$	0.35
Warrants cancelled		(250,000	)	$	0.35
Balance as of September 30, 2013 (1)		5,757,420		$	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, 392,857, and 392,857 shares of common stock vested on June 27, 2012, December 31, 2012, February 26, 2013, and July 15, 2013, respectively, and warrants for 479,459 shares of common stock have been exercised. For the purposes of this Table, only such net vested shares of common stock (1,484,826 shares) have been included, based upon an exercise price of $0.35 per share of common stock.  Each of the other three warrants vest upon the payment by Inter-Mountain of each of the three remaining Investor Notes.

For the nine months ended September 30, 2013, we issued warrants to purchase up to an aggregate of 4,445,714 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) two warrants issued to Inter-Mountain to purchase up to an aggregate of 785,714 shares of our common stock at an exercise price of $0.35 per share.  Also occurring during the nine months ended September 30, 2013 was the exercise of warrants to purchase 479,459 shares of our common stock, at an exercise price of $0.35 per share, by Inter-Mountain and 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 September 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	1,484,826
	March 14, 2018	660,000
	Total	5,757,420