Note 5. Net Loss Per Common Share

6 Months Ended

Feb. 28, 2014

Notes

Note 5. Net Loss Per Common Share

Note 5.  Net Loss Per Common Share

The computation of basic earnings per common share is based on the weighted average number of shares outstanding during the period.  The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the weighted average common stock equivalents which would arise from the exercise of stock options and warrants outstanding using the treasury stock method and the average market price per share during the period.   Common stock equivalents are not included in the diluted loss per share calculation when their effect is anti-dilutive.

No stock options or warrants are included in the computation of diluted weighted average number of shares for the three months and six months ended February 28, 2014 and February 28, 2013 because the effect would be anti-dilutive.  As of February 28, 2014, we had outstanding options and warrants to purchase a total of 9,519,544 shares of our common stock that could have a future dilutive effect on the calculation of earnings per share.