STOCK OPTIONS

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 3. STOCK OPTIONS

The Company has one stock option plan.  The 2002 Equity Incentive Plan (the 2002 Plan) was adopted in 2003. The Company has reserved 150,000 shares of stock for grants under the 2002 plan. Pursuant to the Plan, the Company’s employees, officers, consultants, and directors are eligible to receive grants of incentive and/or non-incentive stock options. The Plan provides that the maximum term for options granted under the Plans is ten years and that the exercise price for the options may not be less than the fair market value of the Company’s common stock on the date of grant.

Options granted pursuant to the 2002 Plan:

On October 3, 2003, options to purchase 45,000 shares were granted under the 2002 Plan at an exercise price of $1.05 per share. The options expire ten years from the date of grant and vest ratably over three years from the date of grant; however, the option agreement stipulates accelerated vesting provisions under certain circumstances as defined.  All options are currently vested.  No options were exercised during the years ended March 31, 2012 and 2011 and no compensation cost has been recognized for stock options awarded under the 2002 Plan.

Options for 15,000 shares were cancelled during the year ended March 31, 2010.  The exercise price of the 2002 Plan options were reduced from $1.05 per share to $0.25 per share in conjunction with the Company’s payment of a cash distribution to stockholders of $0.80 per share in August 2009.  Options for 30,000 shares are currently outstanding under this plan.

The weighted-average remaining contractual life of the outstanding options is approximately 1 year.

During fiscal 2012 and 2011, no new share based payments were granted, and no compensation expense was recognized.