STOCK OPTIONS

6 Months Ended

Aug. 31, 2011

STOCK OPTIONS

STOCK OPTIONS

NOTE  C.      STOCK OPTIONS

At August 31, 2011, the Company had one stock-based employee compensation plan, which is described below.

On September 14, 1996, the Company granted 600,000 stock options, with an exercise price of $0.35 per share, to an officer who is no longer with the Company.  The options vested as follows:

400,000 options	September 14, 1996
100,000 options	June 1, 1997
100,000 options	June 1, 1998

The options are valid in perpetuity.  In addition, for a period of 10 years from the grant date, they increase in the same percentage of any new shares of stock issued; however, no shares were issued during such 10-year periods from the grant dates.  None of the options have been exercised as of August 31, 2011.

The Company follows the fair value recognition provisions of FASB ASC 718, “Compensation — Stock Compensation.” Under this method, compensation cost for all share-based payments is based on the grant-date fair value and amortized to expense over the requisite service period, generally the vesting period.

The Company did not grant any options and no options previously granted vested in any of the periods presented in these financial statements.  Due to this fact, there was no effect on net loss and loss per share.