EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Note 7. EARNINGS PER SHARE

We compute basic earnings per share ("basic EPS") by dividing the net income or loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share ("diluted EPS") gives effect to all dilutive potential shares outstanding. The following table provides the computation of basic and diluted earnings per share for the twelve month periods ended December 31, 2015, 2014, and 2013, respectively.

	Year Ended December 31,
(in thousands, except per share data)	2015			2014			2013
Numerator:
Net income (loss) available to common
shareholders	$	8,364		$	(18,214	)	$	(6,994	)
Effect of dilutive securities
Derivative liability - warrants	$	(1,799	)	$	-		$	-
Accretion on convertible preferred stock	$	222		$	-		$	-
Numerator for diluted income (loss) per common share	$	6,787		$	(18,214	)	$	(6,994	)

Denominator:
Weighted average shares used to compute basic income (loss) per common share		24,333		17,756			17,670
Effect of dilutive securities:
Derivative liability - warrants		28		-			-
Convertible preferred stock		3,137		-			-
Stock options		249		-			-
Denominator for diluted income (loss) per common share		27,747		17,756			17,670
Basic income (loss) per common share	$	0.34	$	(1.03	)	$	(0.40	)
Diluted income (loss) per common share	$	0.24	$	(1.03	)	$	(0.40	)

For the year ended December 31, 2015, warrants to purchase approximately 28,000 shares of common stock and approximately $1,800,000 of the gain on the fair market valuation of the derivative liabilities, options to purchase approximately 249,000 shares of common stock, and the conversion of Series B Preferred Stock into 3,137,141 shares of common stock were included in the computation of diluted earnings per share because their effects were dilutive.

For the year ended December 31, 2014, options and warrants to purchase approximately 6,500,000 shares of common stock were excluded in the computation of diluted earnings per share because their effects were anti-dilutive.

For the year ended December 31, 2013, options and warrants to purchase approximately 12,900,000 shares of common stock were excluded in the computation of diluted earnings per share because their effects were anti-dilutive.