Note 8 - Shareholders' Equity

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 7 - Shareholders' Equity

NOTE 8 – SHAREHOLDERS’ EQUITY

Common Stock

On December 15, 2011, we entered into a Domain Name License Agreement for the exclusive rights to various domain names in connection with our internet business for a period of 3 years. We shall pay a license fee equal to 333,333 shares of common stock per year. On January 10, 2012, we issued the shares relating to the first year of the license fee and valued those shares at $11,667, the stock price on the date of issuance.

We entered into an offering for the private placement of up to 50,000,000 shares of common stock at $0.035 per share. During the three month period ending March 31, 2012, we issued 3,571,571 shares of common stock at gross proceeds of $125,005.

During the three month period ending March 31, 2012, we issued 200,000 restricted shares of common stock for marketing services valued at $7,000. We also issued 1,000,000 shares of our common stock to our corporate counsel in exchange for the cancellation of $35,000 of indebtedness owed by us for legal services that were previously rendered to us.

Stock Options

During the three months ended March 31, 2012, no stock options were granted. The total stock based compensation recognized on our statement of operations for the three months ended March 31, 2012 was $23,595. As of March 31, 2012, the aggregate value of unvested stock options was $169,253, which will vest over an average period of approximately ten months.

The following table summarizes stock option activity for our company during the three month period ended March 31, 2012:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
Outstanding December 31, 2011		30,861,086		$	0.07
Granted		—			—
Exercised		—			—
Forfeited or expired		(8,026,780	)		0.15
Outstanding March 31, 2012		22,834,306		$	0.04		9.46		1,266,236
Vested or expected to vest at March 31, 2012		20,959,307		$	0.04		8.96		1,266,236

The aggregate intrinsic value was calculated as the difference between the market price and the exercise price of our common stock, which was $0.071 as of March 31, 2012.

Warrants

The following table summarizes warrant activity for our company during the three months ended March 31, 2012 and the year ended December 31, 2011:

	Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding December 31, 2011		2,248,954	$	0.10		4.75	$	22,490
Issued		—		—		—		—
Outstanding March 31, 2012		2,248,954	$	0.10		4.50	$	—

There was no aggregate intrinsic value of the 2,248,954 warrants outstanding and exercisable as of March 31, 2012 based on the trading price as of the period then ended.