STOCK WARRANTS AND OPTIONS

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

NOTE 6 - STOCK WARRANTS AND OPTIONS

Stock Warrants

See Note 5 for information on the cancellation during the first quarter of 2015 of 400,000 warrants granted to an unrelated third party during the first quarter of 2013.

During the second quarter of 2015, the Company issued 533,334 warrants to a shareholder/director in connection with the conversion of certain advances effected as of June 30, 2015 (see Note 5). The warrants are exercisable into 533,334 shares of common stock at an exercise price of $0.50 per share.

During the fourth quarter of 2015, the Company issued 13,000 warrants to an unrelated third party in connection with the purchase of domain names (see Note 5). The warrants are exercisable into 13,000 shares of common stock at an exercise price of $0.50 per share.

The fair value of warrants issued in 2015 at the date of grant was $4,797 and was capitalized as website rights for the year ended December 31, 2015, as estimated using the Black-Scholes Model with the following weighted average assumptions for fiscal year 2015:

	2015	2014
Expected dividend yield	0.0%	N/A
Expected term	5 yrs	N/A
Expected volatility	272%	N/A
Risk-free interest rate	1.7%	N/A
Fair value per warrant	$.37	N/A

Other than the foregoing, there were no other warrants granted or exercised for the years ended December 31, 2015 and 2014. A total of zero and 400,048 warrants expired for the years ended December 31, 2015 and 2014, respectively. Warrants outstanding and exercisable as of December 31, 2015:

			Weighted		Exercisable
	Number of		Average		Number of
Exercise Price	Warrants		Remaining Life		Warrant
$0.60		3,590,000		0.5		3,590,000
$0.75		100,000		0.7		100,000
$0.50		166,667		1.9		166,667
$0.50		546,334		4.5		546,334
		4,403,001				4,403,001

Stock Options

In September 2003, shareholders of the Company approved an employee stock option plan (the "2003 Option Plan") authorizing the issuance of options to purchase up to 1,000,000 shares of common stock. The 2003 Option Plan is intended to give the Company greater ability to attract, retain, and motivate officers, key employees, directors and consultants; and is intended to provide the Company with the ability to provide incentives more directly linked to the success of the Company's business and increases in shareholder value.

During the third quarter of 2013, the board of directors increased the number of shares reserved for issuance under the 2003 Option Plan from 1,000,000 to 1,250,000.

During the fourth quarter of 2014, the board of directors approved the issuance of 124,167 additional employee stock options to cover services for the year 2014. These options have an exercise price of $0.30 per share and expire in five years from their issue date.

The fair value of options at the date of grant was $24,747 and was recognized as non-cash compensation for the year ended December 31, 2014, as estimated using the Black-Scholes Model with the following weighted average assumptions:

	2015	2014
Expected dividend yield	N/A	0.0%
Expected term	N/A	5.0 yrs
Expected volatility	N/A	266%
Risk-free interest rate	N/A	1.7%
Fair value per warrant	N/A	$.20

The expected term of the options and warrants represents the estimated period of time until exercise and is based on the Company's historical experience of similar option grants, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. For fiscal 2015 and 2014, expected stock price volatility is based on the historical volatility of our stock. The risk-free interest rate is based on the U.S. Treasury bill rate in effect at the time of grant with an equivalent expected term or life. The Company has not paid dividends in the past and does not currently plan to pay any dividends in the future.

Information regarding activity for stock options under our plan is as follows:

	2015				2014
			Weighted					Weighted
			average					average
	Number of		exercise		Number of			exercise
	shares		price		shares			price
Outstanding at beginning of year		823,369	$	.41		963,402		$	.56
Options granted		0		.00		124,167			.30
Options exercised		0		.00		0			.00
Options forfeited/expired		0		.00		(264,200	)		0.89
Outstanding at end of year		823,369	$	.41		823,369		$	.41

Options exercisable at end of year		823,369		823,369
Non-vested options at end of year		0		0
Weighted-average
Remaining contractual term – all options	2.2 yrs		3.2 yrs
Weighted-average
Remaining contractual term – vested options	2.2 yrs		3.2 yrs
Fair value of options vested during the year	$	0	$	24,747
Aggregate intrinsic value	$	0	$	0