Note 4 - Stock Options

9 Months Ended

Sep. 30, 2015

Notes

Note 4 - Stock Options

NOTE 4 - STOCK OPTIONS

As of September 30, 2015, the Company had outstanding stock options, which have been granted periodically to individual employees and directors with no less than three years of continuous tenure with the Company.  The Board of Directors did not issue stock options during the nine months ended September 30, 2015. The Board of Directors granted 150,000 stock options subject to shareholder approval during the Annual Shareholders’ meeting, June 3, 2016. The estimated expense that would be recognized for these options is approximately $1,900.

The fair value of each option award is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2014.

	2014
Dividend yield	0.00%
Expected volatility	75%
Risk-free interest rate	0.68%
Expected term (in years)	3
Estimated Fair Value per Option Granted	$0.20

The Company uses historical data to estimate option exercise rates.  The option exercise rate for option grants in 2005 through 2014 was 6.00%.

A summary of option activity during the nine months ended September 30, 2015, is as follows:

	Number Outstanding	Weighted-Average Exercise Price Per Share
Outstanding at December 31, 2014	440,000	$0.39
Granted	--	--
Exercised	--	--
Expired	(245,000)	0.37
Outstanding at September 30, 2015	195,000	$0.39