Note 6 - Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 6 – Earnings (Loss) Per Share

For periods with net income, net income per common share information is computed using the two-class method. Under the two-class method, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. No such adjustment to earnings is made during periods with a net loss, as the holders of the convertible preferred shares have no obligation to fund losses.

The Company’s calculation of earnings per share is as follows:

	2015			2014
Basic earnings per common share:
Net income applicable to common shareholders – basic	$	461,536		$	533,428
Portion allocable to common shareholders		99.2	%		99.2	%
Net income allocable to common shareholders		457,844			529,161
Weighted average basic shares outstanding		32,020,575			31,906,572
Basic earnings per share	$	0.01		$	0.02
Dilutive earnings per common share:
Net income allocable to common shareholders		457,844			529,161
Add: undistributed earnings allocated to participating securities		3,692			4,267
Numerator for diluted earnings per common share		461,536			533,428
Weighted average basic shares outstanding		32,020,575			31,906,572
Diluted effect:
Stock options		21,000			28,000
Unvested restricted stock awards		4,000			15,714
Conversion equivalent of dilutive Series B Convertible Preferred Stock		3,307,299			3,307,299
Conversion equivalent of dilutive Convertible Preferred Stock		255,000			255,000
Weighted average dilutive shares outstanding		35,607,874			35,512,585
Dilutive earnings per share	$	0.01		$	0.02

The table below sets forth the calculation of the percentage of net earnings allocable to common shareholders under the two-class method:

	2015			2014
Numerator:
Weighted average participating common shares		32,020,575			31,906,572
Denominator:
Weighted average participating common shares		32,020,575			31,906,572
Add: Weighted average shares of Convertible Preferred Stock		255,000			255,000
Weighted average participating shares		32,275,575			32,161,572
Portion allocable to common shareholders		99.2	%		99.2	%

Diluted earnings per share for the years ended December 31, 2015 and 2014 do not reflect following potential common shares, as the effect would be antidilutive.

	Years Ended December 31,
	201 5		201 4
Stock options		610,000		610,000
Unvested restricted stock awards		-		-
Convertible preferred stock		-		-
Total		610,000		610,000