(8) STOCK OPTIONS

12 Months Ended

Dec. 31, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

(8) STOCK OPTIONS

In June 2004, the Company created the 2004 Stock Option Plan in an effort to provide incentive to employees, officers, agents, consultants, and independent contractors through proprietary interest. The Board of Directors shall act as the Plan Administrator, and may issue these options at its discretion. The maximum number of shares that may be issued under this Plan is 200,000 or 5% of the Company’s outstanding shares, whichever is greater. Prior to June 2004, the Company issued options to various employees under the previous Stock Option Plan that was also administered by the Board of Directors. All issuances have varying vesting and expiration timelines. As at December 31, 2011 and December 31, 2010, 42,800 and 53,800 outstanding options were exercisable, respectively.

At December 31, 2011, the Company has one non-qualified stock-based compensation plan, the 2004 Stock Option Plan. This Non-Qualified Plan allows for the issuance of a maximum of 200,000 shares of common stock or 5% of the outstanding balance of shares of the Company on the date of grant, whichever is greater. Under the provisions of the Option Plan, the exercise price of any stock options issued is a minimum of 110% of the closing market price of the Company’s stock on the grant date of the option.

At December 31, 2011, there was $5,839 unvested stock-based compensation expense to recognize. Total share-based compensation expense recognized in the Statement of Operations aggregated $9,731 for the year ended December 31, 2011 and $0 for the year ended December 31, 2010. The aggregate intrinsic value was calculated based on the positive difference between the closing market price of the Company’s common stock and the exercise price of the underlying options.

To calculate the option-based compensation, the Company used the Black-Scholes option-pricing model. The Company’s determination of fair value of option-based awards on the date of grant using the Black-Scholes model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, risk-free interest rate, and the expected life of the options. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. The expected volatility, holding period, and forfeitures of options are based on historical experience.

In 2011, there were a total of 9,000 stock options issued with an exercise price of $11.91. In 2010, no stock options were issued under the 2004 Stock Option Plan.

Of the options that were issued in 2011, 5,000 were issued to members of the Board of Directors and 4,000 were issued to various employees.

The details of employee option activity for the years ended December 31, 2011 and 2010 are as follows:

	Number of Shares			Weighted Average Exercise Price
Outstanding, December 31, 2009		67,300		$	16.35
Cancelled/Expired		(13,500	)	$	22.16
Outstanding and Exercisable, December 31, 2010		53,800		$	14.89
Granted		9,000			11.91
Cancelled/Expired		(20,000	)	$	17.80
Outstanding and Exercisable, December 31, 2011		42,800		$	12.91

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

Range of Exercise Prices	Number Outstanding and Exercisable at December 31, 2011	Weighted Average Remaining Contractual Life at December 31, 2011	Weighted Average Exercise Price at December 31, 2011
Below - $16.00	35,200	1.90 years	$	11.99
$ 16.01 -$18.00	5,000	0.37 years	$	16.10
$ 18.01 -$20.00	2,600	1.58 years	$	19.24
	42,800	1.70 years	$	12.91