diff --git a/README.md b/README.md
index 4419c0e..19aea89 100644
--- a/README.md
+++ b/README.md
@@ -115,7 +115,7 @@ codescanai --provider custom --host http://localhost --port 5000 --token your_to
 Using locally running [Ollama](https://github.com/ollama/ollama):
 
 ```bash
-codescanai --provider custom --model llama3 --host http://localhost --port 11434 --endpoint /api/generate --directory path/to/code
+codescanai --provider custom --model llama3 --host http://localhost --port 11434 --endpoint /v1 --directory path/to/code
 ```
 
 ### Supported arguments
diff --git a/core/code_scanner/agent_scanner.py b/core/code_scanner/agent_scanner.py
index eedc176..90368d6 100644
--- a/core/code_scanner/agent_scanner.py
+++ b/core/code_scanner/agent_scanner.py
@@ -41,8 +41,9 @@ def __init__(self, args) -> None:
             if args.endpoint:
                 host_url += args.endpoint
             os.environ["OPENAI_BASE_URL"] = host_url
-            if args.token:
-                os.environ["OPENAI_API_KEY"] = args.token
+            # The OpenAI SDK requires a non-empty API key even for local servers that
+            # don't authenticate. Fall back to a dummy value when no token is supplied.
+            os.environ["OPENAI_API_KEY"] = args.token if args.token else "dummy"
 
         self.agent = create_agent(
             model_str=model_str,