Note 10. Stock Warrants: Stock Warrants Expense Policy (Policies)

9 Months Ended

Sep. 30, 2014

Policies

Stock Warrants Expense Policy

The Company records compensation expense for stock warrants based on the estimated fair value of the warrants on the date of grant using the Black-Scholes valuation model.  The Company uses historical data among other factors to estimate the expected price volatility, the expected warrant term and the expected forfeiture rate.  The risk-free rate is based on the U.S. Treasury yield curve in effect at the date of grant for the expected term of the warrant.