Stockholders' equity

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Stockholders' equity

8.   Stockholders' equity:

The holders of common stock are entitled to one vote for each share held.  There are no restrictions that limit the Company's ability to pay dividends on its common stock.  The Company has not declared any dividends since incorporation.  The Company's common stock has no par value per common stock.

(a)  Common stock issuances:

There were no stock issuances during the year ended December 31, 2011.

During the year ended December 31, 2010, the Company purchased the remaining domain name payments for 6,000,000 common shares at a value of $0.15 per share for a total value of $900,000.

During the year ended December 31, 2010, the Company completed a private placement offering with Unibet Group Plc. of 15,000,000 common shares at $0.15 per share.  Total proceeds of the offering were $2,250,000.

 (b) Stock option plans:

(i)  1999 stock option plan:

The Company has reserved a total of 1,895,000 common shares for issuance under its 1999 stock option plan.  The plan provides for the granting of non-qualified stock options to directors, officers, eligible employees and contractors of the Company. The Board of Directors determines the terms of the options granted, including the number of options granted, the exercise price and their vesting schedule.

As at December 31, 2011, there were a total of nil stock options (2010 - nil) outstanding. During the year ended December 31, 2011, there were nil options exercised (2010 - nil) and nil options expired unexercised (2010 - nil).

(ii) 2001 stock option plan:

During the year ended December 31, 2001, the Company's Board of Directors adopted the 2001 stock option plan. The Company has reserved a total of 5,424,726 common shares for issuance under the 2001 stock option plan. The plan provides for the granting of incentive and non-qualified stock options to directors, officers, eligible employees and contractors of the Company. The Board of Directors determines the terms of the options granted, including the number of options granted, the exercise price and their vesting schedule.

As at December 31, 2011, there were a total of 3,224,700 stock options (2010 - 3,224,700 stock options) issued, of which 1,934,700 (2010 - 1,934,700) had been exercised as at December 31, 2011. During the year ended December 31, 2011, nil options were exercised (2010 - nil) and nil (2010 - 545,000) stock options expired unexercised. Therefore as at December 31, 2011, there were 1,290,000 (2010 - 1,290,000) stock options outstanding at exercise prices ranging from $0.17 to $0.33 per share.

Subsequent to the year ended December 31, 2011, the expiry date on 75,000 options with an expiry date of February 28, 2012 and an exercise price of $0.27 per share, was extended for 2 years and the expiry date on 175,000 options with an expiry date of March 5, 2012, and an exercise prices of $0.33 per share, was extended for 1 year.

During the year ended December 31, 2010, the outstanding option agreements were amended to make all unvested options to vest immediately.  

(iii) 2005 stock option plan:

During the year ended December 31, 2005, the Company's Board of Directors adopted the 2005 stock option plan, which was approved by the shareholders at the Annual General meeting. The Company has reserved a total of 2,000,000 common shares for issuance under the 2005 stock option plan. The Plan is intended to provide incentive to employees, directors, advisors and consultants of the Corporation to encourage proprietary interest in the Corporation, to encourage such employees to remain in the employ of the Corporation or such directors, advisors and consultants to remain in the service of the Corporation, and to attract new employees, directors, advisors and consultants with outstanding qualifications. The Board of Directors determines the terms of the options granted, including the number of options granted, the exercise price and their vesting schedule.    

As at December 31, 2011, there were a total of 1,055,000 (2010 - 1,299,692) stock options outstanding at exercise prices ranging between $0.15 and $0.33 per share. During the year ended December 31, 2011, 244,692 (2010 - 1,203,750) stock options expired unexercised.

Subsequent to the year ended December 31, 2011, 50,000 options expired unexercised, the expiry date on 285,000 options with an expiry date of February 28, 2012 and an exercise price of $0.27 per share, was extended for a further 2 years and the expiry date on 100,000 options with an expiry date of March 5, 2012 and an exercise price of $0.33 per share, was extended for a further 1 year.

During the year ended December 31, 2010, the outstanding option agreements were amended to make all unvested options to vest immediately.

A summary of stock option activity for the stock option plans for the years ended December 31, 2011 and 2010 are as follows:

	Number of shares			Weighted average exercise price
Outstanding, December 31, 2009		3,718,442		$	0.38
Granted		620,000			0.15
Exercised		—			—
Expired		(1,748,750	)		0.43
Outstanding, December 31, 2010		2,589,692		$	0.29
Granted		—			—
Exercised		—			—
Expired		(244,692	)		0.91
Outstanding, December 31, 2011		2,345,000		$	0.23

The aggregate intrinsic value for options as of December 31, 2011 was $636,850 (2010 - $nil) with a closing share price of $0.50 per share.

The following table summarizes information concerning outstanding and exercisable stock options at December 31, 2011:

Range of exercise prices per share	Number outstanding		Number exercisable		Expiry date
$0.27		410,000		410,000		February 28, 2012 (1)
0.33		275,000		275,000		March 5, 2012 (2)
0.31		460,000		460,000		May 28, 2013
0.17		580,000		580,000		June 19, 2014
0.15		620,000		620,000		September 30, 2015
		2,345,000		2,345,000

(1)  Subsequent to the year end December 31, 2011, 360,000 of these options were extended until February 28, 2014.

(2)  Subsequent to the year end December 31, 2011, these options were extended until March 5, 2013.

During the year ended December 31, 2011, the Company recorded stock-based compensation expense of $nil (2010 - $68,967) relating to the issuance of common stock purchase options to certain employees, officers, and directors of the Company in accordance with ASC 718, Compensation - Stock Compensation.