Note 1. Operations and Summary of Significant Accounting Policies: Stock Warrants, Policy (Policies)

12 Months Ended

Dec. 31, 2015

Policies

Stock Warrants, Policy

M.           Stock Warrants – 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.