Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 123 (“SFAS 123”). SFAS defines a “fair value” based method of accounting for employee options or similar equity instruments. Had compensation cost been determined under the provi- sions of SFAS 123, the following pro forma net income (loss) and per share amounts would have been recorded. The Company measures compensation cost as pre- scribed by APB Opinion No. 25 (“APB 25”), accounting for Stock Issued to Employees. No compensation cost has been recognized in the financial statements as  the exercise price of all option grants is equal to the market price of the Company’s Common Stock at the date of grant. In October 1995, the Financial Accounting The pro forma amounts were determined using the Black-Scholes model with the following assumptions: In each of fiscal years 2001, 2000 and 1999, $5,963,152, $8,976,422 and $441,102, respectively, of the Company’s royalty revenues were received from the same source. The Company maintains a SEP Plan in which all employ- ees are eligible to participate.The Company contributes a minimum of 3% of an employee’s compensation to  an account set up for the benefit of the employee. If an employee also chooses to contribute to the SEP Plan through salary reduction contributions, the Company will match such contributions to a maximum of 7%  of the employee’s salary.The Company contributed $76,063, $82,528 and $79,543, in fiscal years 2001, 2000 and 1999, respectively. 26 11. SIMPLIFIED EMPLOYEE PENSION (“SEP”) PLAN 10. MAJOR CUSTOMERS 2001 2000 1999 Net income (loss) As reported $ 1,138,297 $ 3,952,979 $ (8,808,173) Pro Forma $ 1,025,466 $ 3,522,851 $ (9,154,224) Net income (loss) per basic share As reported $ 0.06 $ 0.23 $ (0.51) Pro Forma $ 0.06 $ 0.20 $ (0.53) Net income (loss) per diluted share As reported $ 0.06 $ 0.22 $ (0.51) Pro Forma $ 0.06 $ 0.20 $ (0.53) 2001 2000 1999 Weighted average expected volatility 51.2% 45.5% 58.9% Weighted average expected option term in years 5.5 5.5 5.5 Weighted average risk free interest rate 5.7% 5.4% 4.6% Forfeiture rate 5% 5% 5% Weighted average grant fair value $1.27 $2.12 $2.62