6. Stock Option Plan

6 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Stock Option Plan

On September 22, 2011, the Board of Directors of the Company adopted the Company’s 2011 Stock Option Plan, which was approved by the shareholders of the Company on December 8, 2011. Under this plan options to purchase a maximum of 133,000 shares of common stock may be granted to any employee of the Company, including officers. Such options may be either incentive stock options or non-qualified options and must be granted with an exercise price no less than the fair market value of the stock on the date of the grant. No stock options have been granted under this plan.

On December 2, 1998, the Company adopted its Stock Option Plan of 1998 which was amended and restated effective December 5, 2001, pursuant to which options to purchase a maximum of 85,000 shares of common stock may be granted to executives and key employees.  Incentive stock options have been granted under this plan with an exercise price no less than fair market value of the stock on the date of grant.  Outstanding options generally are exercisable for ten years from the date of grant, except for one grant totaling 4,700 options which are exercisable for a 5-year term.  Outstanding options have expiration dates ranging from September 21, 2016 to September 21, 2021. No additional options may be granted under this plan.

There were no stock options granted in the first six months of fiscal 2016 (period ended December 31, 2015) or in the first six months of fiscal 2015 (period ended December 31, 2014). The Company recorded no stock option compensation expense for either of the six month periods ended December 31, 2015 or December 31, 2014.

For the full fiscal year ending June 30, 2016, the Company does not expect any stock option compensation expense based on stock options already granted and assuming no further option grants during the remainder of the fiscal year.  However, our assessment of the compensation expense will be affected by the number of stock options actually granted (if any) during the remainder of the year as well as the number of outstanding options that are forfeited.

Stock option transactions for the Company’s employee stock option plans for the three months and six months ended December 31, 2015 are as follows:

	December 31, 2015
	Three Months				Six Months
			Weighted				Weighted
			Average				Average
	Shares		Exercise Price		Shares		Exercise Price
Beginning balance		33,200	$	1.96		33,200	$	1.96
Granted		--		--		--		--
Exercised		--		--		--		--
Cancelled or expired		4,000	$	2.20		4,000	$	2.20
Ending balance		29,200	$	1.93		29,200	$	1.93
Options exercisable at end of period		29,200	$	1.93		29,200	$	1.93