Note 5 - Net Income (Loss) Per Share

6 Months Ended

Jul. 31, 2016

5. Net Income (Loss) Per Share

We calculate basic income (loss) per share by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. Diluted income (loss) per share reflects the effects of potentially dilutive securities. Because we incurred a net loss for the three and six months ended July 31, 2015, basic and diluted loss per share for this period was the same because the inclusion of dilutive potential common shares related to outstanding stock awards in the calculation would have been antidilutive.

Potential common shares of 785,870 and 3,044,475 relating to outstanding stock awards to directors and our employee as well as stock purchase warrant to Broadwood, respectively have been excluded from diluted weighted average common shares for the three and six months ended July 31, 2015, respectively, as the effect would have been antidilutive.

Potential common shares of 3,007,226 and 2,948,613 relating to outstanding stock awards to directors and our employee as well as stock purchase warrant to Broadwood, respectively, have been excluded from diluted weighted average common shares for the three and six months ended

July 31, 2016, as the effect would have been antidilutive.

The following table presents reconciliations of the numerators and denominators of the basic and diluted loss per share computations for net income (loss). In the tables below, “Net income (loss)” represents the numerator and “shares” represents the denominator (in thousands, except per share amounts):

	Three Months Ended July 31,					Six Months Ended July 31,
	2016		2015			2016		2015

Net income (loss)	$	128	$	(265	)	$	1,452	$	(576	)
Basic net income (loss) per share:
Weighted-average shares outstanding-Basic		14,644		14,644			14,644		14,659
Basic net income (loss) per share	$	0.01	$	(0.02	)	$	0.10	$	(0.04	)
Diluted net (loss) income per share:
Weighted average shares outstanding - basic		14,644		14,644			14,644		14,659
Effect of potentially dilutive securities		-		-			-		-
Weighted average shares outstanding - diluted		14,644		14,644			14,644		14,659
Diluted net income (loss) per share	$	0.01	$	(0.02	)	$	0.10	$	(0.04	)