8. EARNINGS PER COMMON SHARE

9 Months Ended

Sep. 30, 2013

Net income per share:

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 September 30, 2013 and 2012, there were outstanding warrants convertible to 0 and 6,000 shares of common stock, respectively. At September 30, 2013 and 2012, there were outstanding stock options convertible to 945,000 and 1,045,000 shares of common stock, respectively.

For the nine months ended September 30, 2013 and 2012, respectively, there were 902 and 0 options included in the computation of diluted earnings per share.