10. EARNINGS PER COMMON SHARE

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

EARNINGS PER COMMON SHARE

Basic earnings per share (“EPS”) is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS is calculated by dividing net income (loss) by the weighted-average number of common shares and dilutive common stock equivalents (warrants, stock awards and stock options) outstanding during the period. Diluted EPS reflects the potential dilution that could occur if options to purchase common stock were exercised for shares of common stock.

At June 30, 2013 and 2012, there were outstanding warrants convertible to 0 and 21,941 shares of common stock, respectively. At June 30, 2013 and 2012, there were outstanding stock options convertible to 945,000 and 1,007,500 shares of common stock, respectively. There were no potentially dilutive securities for the six months ended June 30, 2013 and 2012 that were included in the computation of diluted earnings per share because their effect would have been anti-dilutive, as the exercise price for the outstanding warrants and options exceeded the average market price for our common stock.