WARRANTS AND OPTIONS

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

NOTE 12 - WARRANTS AND OPTIONS

Common stock warrants

The following table summarizes warrants outstanding and related prices for the shares of the Company's common stock issued to shareholders at December 31, 2015:

Exercise Price		Number Outstanding		Warrants Outstanding Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise price		Number Exercisable		Warrants Exercisable Weighted Average Exercise Price
$	0.01 to 0.10		38,925,000		3.00	$	0.10		38,925,000	$	0.10
	0.11 to 0.20		16,150,000		1.74		0.15		16,150,000		0.15
	0.21 to 0.30		17,310,000		0.95		0.25		17,310,000		0.25
Total			72,385,000		2.23	$	0.15		72,385,000	$	0.15

Transactions involving the Company's warrant issuance are summarized as follows:

	Number of Shares			Weighted Average Price Per Share
Outstanding at December 31, 2013		91,736,274		$	0.22
Issued		10,500,000			0.15
Exercised		-
Expired		(11,374,590	)		(0.35	)
Outstanding at December 31, 2014		90,861,684			0.20
Issued		5,550,000			0.15
Exercised		-			-
Expired		(24,026,684	)		(0.24	)
Outstanding at December 31, 2015		72,385,000		$	0.15

In conjunction with the issuance of convertible notes, during the year ended December 31, 2014, the Company issued an aggregate of warrants to purchase 10,500,000 shares of common stock with an exercise price of $0.15 per share expiring three years from the date of issuance. Please see Notes 7 and 9.

In conjunction with the issuance of convertible notes, during the year ended December 31, 2015, the Company issued an aggregate of warrants to purchase 5,550,000 shares of common stock with an exercise price of $0.15 per share expiring three years from the date of issuance. Please see Notes 7 and 9.

On August 12, 2015, the Company repriced to $0.10 and extended for the three years an aggregate of 11,925,000 expiring warrants previously issued to Board Members. The change in fair value of the extended warrants were valued using the Black Sholes option pricing method with the following assumptions: dividend yield $-0-, volatility of underlying common stock of 349.90%, risk free rate of 1.88% and expected life of 3.00 years. The determined estimated fair value of $100,276 was charged to operations during the year ended December 31, 2015.

Preferred stock warrants

The following table summarizes warrants outstanding and related prices for the shares of the Company's Series A convertible preferred stock issued at December 31, 2015:

Exercise Price		Number Outstanding		Warrants Outstanding Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise price		Number Exercisable		Warrants Exercisable Weighted Average Exercise Price
$	0.50		2,120,000		4.05	$	0.50		1,120,000	$	0.50
	1.00		71,000		1.72		1.00		71,000		1.00
	1.50		333,500		1.67		1.50		333,500		1.50
Total			2,524,500		3.66	$	0.65		1,524,500	$	0.75

Transactions involving the Company's warrant issuance are summarized as follows:

	Number of Shares			Weighted Average Price Per Share
Outstanding at December 31, 2013		-		$	-
Issued		1,914,500			0.66
Exercised
Expired
Outstanding at December 31, 2014		1,914,500			0.66
Issued		705,000			0.61
Exercised		-			-
Canceled		(95,000	)		1.00
Outstanding at December 31, 2015		2,524,500		$	0.65

In 2014, the Company issued an aggregate 414,500 preferred stock warrants in connection with services provided. The warrants are exercisable for three to five years from the date of issuance at an exercise prices from $0.50 to $1.50 per preferred share. The warrants were valued using the Black Sholes option pricing method with the following assumptions: dividend yield $-0-, volatility of 287.80% to 319.28%, risk free rate of 0.77% to 1.67% and expected life of 3.00 to 5.00 years. The determined estimated fair value of $107,732 was charged to operations during the year ended December 31, 2014.

In connection with entering into the Progress Advocates LLC joint venture with LSH, LLC, the Company issued to LSH, LLC two five-year warrants to purchase an aggregate of 1,500,000 shares of series A convertible preferred stock of Debt Resolve at an exercise price of $0.50 per preferred share. The first warrant for 1,000,000 shares of Debt Resolve preferred stock vests and becomes exercisable 25% upon issuance and the balance upon the achievement by Progress Advocates of specific increasing revenue goals. The second warrant for 500,000 shares of Debt Resolve preferred stock vests and becomes exercisable when Progress Advocates achieves at least $1,000,000 in cumulative "operating income." The vested warrants were valued using the Black Sholes option pricing method with the following assumptions: dividend yield $-0-, volatility of 290.46% to 350.93%, risk free rate of 1.43% to 1.54% and expected life of 4.27 to 5.00 years. The determined estimated fair value of $108,672 and $29,933 was recorded as compensation in majority owned subsidiary during the years ended December 31, 2015 and 2014.

On October 5, 2015, the Company issued LSH, LLC a five year warrant to purchase 500,000 shares of series A convertible stock of Debt Resolve at an exercise price of $0.50 per preferred share. The warrant is contingent upon Progress Advocates, LLC achieving operational goals, as defined.

During the year ended December 31, 2015, the Company issued an aggregate 205,000 Series A convertible preferred stock warrants in connection with services provided of which 95,000 were subsequently canceled. The warrants are exercisable for three to five years from the date of issuance at an exercise prices from $0.50 to $1.50 per preferred share. The warrants were valued using the Black Sholes option pricing method with the following assumptions: dividend yield $-0-, volatility of underlying common stock of 306.06% to 355.95%, risk free rate of 0.59% to 1.33% and expected life of 3.00 to 5.00 years. The determined estimated fair value of $17,306 was charged to operations during the year ended December 31, 2015.

Options

The following table summarizes options outstanding and related prices for the shares of the Company's common stock issued at December 31, 2015:

Exercise Price		Number Outstanding		Option Outstanding Options Average Remaining Contractual Life (years)		Weighted Average Exercise price		Number Exercisable		Options Exercisable Weighted Average Exercise price
$	0.015		3,000,000		5.17	$	0.015		1,000,000	$	0.015
	0.02		250,000		5.10		0.02		250,000		0.02
	0.025		250,000		6.65		0.025		250,000		0.025
	0.06		3,000,000		2.42		0.06		3,000,000		0.06
	0.09		250,000		2.93		0.09		250,000		0.09
	0.095		500,000		3.05		0.095		500,000		0.095
	0.10		650,000		2.19		0.10		650,000		0.10
	0.13		500,000		1.34		0.13		500,000		0.13
	0.17		4,500,000		1.27		0.17		4,500,000		0.17
	0.19		1,000,000		0.60		0.19		1,000,000		0.19
	0.22		175,000		1.25		0.22		175,000		0.22
	5.00		1,517,434		0.65		5.00		1,517,434		5.00
Total			15,592,434		2.35	$	0.67		13,592,434	$	0.67

Transactions involving the Company's option issuance are summarized as follows:

	Number of Shares			Weighted Average Price Per Share
Outstanding at December 31, 2013		14,198,434		$	0.86
Issued		3,250,000			0.015
Exercised		-			-
Expired		(403,000	)		(3.14	)
Outstanding at December 31, 2014		17,045,434			0.64
Issued		250,000			0.025
Exercised		--			--
Expired		(1,703,000	)		(1.19	)
Outstanding at December 31, 2015		15,592,434		$	0.67

In 2014, the Board granted stock options to purchase 3,000,000 shares of common stock of the Company at exercise price of $0.015 with exercise period of seven years to an officer employee, vesting 1/3 each year for three years.

In 2014, the Board granted stock options to purchase 250,000 shares of common stock of the Company at exercise price of $0.02 with exercise period of seven years to a consultant, fully vested at the date of issuance.

In 2015, the Board granted stock options to purchase 250,000 shares of common stock of the Company at exercise price of $0.025 with exercise period of seven years to a new board member, fully vested at the date of issuance.

The fair value of the options issued to employees and consultants were determined using the Black-Scholes option pricing method with the following assumptions: Dividend yield: 0%; Volatility: 304.56% to 350.51%; and Risk Free rate: 2.13% to 2.14%.

Total stock-based compensation expense for options for the years ended December 31, 2015 and 2014 amounted to $21,250 and $17,500, respectively.