STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2013

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 14. STOCKHOLDERS’ EQUITY

Common Stock

As of December 31, 2013, we had 18,871,420 shares of common stock issued and outstanding.  We issued 8,796,972 shares of common stock for the year ended December 31, 2013 comprised of 3,750,000 shares of common stock issued to IPMD pursuant to the January 2013 Offering, 825,000 shares of common stock issued to Messrs. Gray and Wallberg pursuant to the March 2013 Offering, 3,072,648 shares of common stock issued for installment payments due on the June 2012 Note with Inter-Mountain, 725,274 shares of common stock issued for the cashless exercise of warrants held by Inter-Mountain, 363,750 shares of common stock issued for consulting services, 60,000 shares of common stock issued in lieu of wages, and 300 shares of common stock issued for the vesting of certain restricted stock awards

Preferred Stock

As of December 31, 2013, we had no shares of Series A Preferred Stock (the "Series A Shares").  For the year ended December 31, 2013, we did not issue any new Series A Shares.

On August 15, 2013, we provided notice to Ironridge Global III, LLC (“Ironridge”) for the redemption of all of the outstanding Series A Shares, 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 December 31, 2013 and the changes therein during the two years then ended:

	Number of Shares of Common Stock Subject to Exercise			Weighted – Average Exercise Price
Balance as of December 31, 2011		612,594		$	2.45
Warrants issued		1,428,571			0.35
Warrants exercised		-			-
Warrants cancelled		-			-
Balance as of December 31, 2012		2,041,165		$	0.98
Warrants issued		4,445,714			0.56
Warrants exercised (1)		(1,571,428	)		0.35
Warrants cancelled		(250,000	)		0.35
Balance as of December 31, 2013 (1)		4,665,451		$	0.82

(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 three warrants for 1,571,428 shares of common stock have been exercised.  For the purposes of this Table, only such net vested shares of common stock from the fourth warrant (392,857 shares) have been included, based upon an exercise price of $0.35 per share of common stock.  On January 22, 2014, we elected to offset and deduct the three remaining Investor Notes from the principle amount due to Inter-Mountain under the June 2012 Note and as a result of the offset and deduction the three remaining warrants terminated.

For the year ended December 31, 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, and (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 year ended December 31, 2013 was the cashless exercise of warrants to purchase 1,571,428 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 December 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		392,857
March 14, 2018		660,000
Total		4,665,451