Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2011

Net Income (Loss) Per Share [Abstract]

Net Income (Loss) Per Share

NOTE 6 — Net Income (Loss) Per Share

The Company computes net income (loss) per share by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities by including other common stock equivalents, such as stock options and warrants, in the weighted-average number of shares outstanding for a period. Common stock equivalents are excluded from the calculation in loss periods, as the effect is anti-dilutive.

The tables below set forth the reconciliation of the denominator of the income (loss) per share calculations:

	Three-months ended
	June 30,
	2011		2010
Shares used in computing basic net income per share		141,996,000		109,415,000
Dilutive effect of stock options and warrants(1)(3)		—		—
Shares used in computing diluted net income per share		141,996,000		109,415,000

	Six-months ended
	June 30,
	2011		2010
Shares used in computing basic net income per share		131,136,000		109,415,000
Dilutive effect of stock options and warrants(2)(3)		—		—
Shares used in computing diluted net income per share		131,136,000		109,415,000

(1) Potential common shares of 13,902,000 and 8,425,000 for the exercise of stock options and warrants have been excluded from diluted weighted average common shares for the three month periods ended June 30, 2011 and 2010, respectively, as the effect would be anti-dilutive.

(2)

Potential common shares of 13,810,000 and 8,481,000 for the exercise of stock options and warrants have been excluded from diluted weighted average common shares for the six month periods ended June 30, 2011 and 2010, respectively, as the effect would be anti-dilutive.

(3)

Also excluded from both the June 30, 2011 and 2010 computations are the potential of approximately 71 million common share that would be issued upon the conversion of the total number of shares of Preferred Stock outstanding, at the option of the preferred shareholders. Additionally excluded from both the June 30, 2011 and 2010 computations are 4.5 million and 21.5 million , respectively, common shares issuable in payment of accrued stock dividends

The number of shares of common stock, no par value, outstanding at August 8, 2011 was 141,995,826.

At June, 2011 the Company had outstanding 30,000 shares of convertible, voting, cumulative, Series A preferred stock. Through December 31, 2009, dividends accrued and were payable quarterly in arrears at the annual rate of 9% of the Original Issue Price of $100 per share, either in cash or common stock, at the decision of the Company. Effective January 1, 2010, dividends accrue and are payable quarterly in arrears at the annual rate of 15% given that the Company is not listed for trading on the American Stock Exchange, a NASDAQ Stock Market or the New York Stock Exchange. For purposes of valuing the common stock payable to holders of Series A Preferred in lieu of cash with respect to such quarterly dividends, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the 10 day period ending the day prior to the dividend payment date. At June 30, 2011, the Company has accrued dividends distributable in common stock of $225,000, which equates to approximately 4,492,000 common shares issuable, and $17,500 of accrued dividends payable in cash. In March 2011, the Company issued 32,580,930 shares of common stock in payment of accrued preferred stock dividends payable in common stock of $465,000, which were accrued as of December 31, 2010.

Series A preferred stock can, at the option of the holder, be converted into fully paid shares of common stock. The number of shares of common stock into which shares of Series A preferred may be converted shall be obtained by multiplying the number of shares of Series A preferred to be converted by the Original Issue Price of $100 and dividing the result by the product of $0.034 (the “Reference Price”) times 1.25, which equates to approximately 71 million common shares should the total number of outstanding preferred shares be converted. After December 31, 2009, the Company can redeem the Series A preferred shares at a price per share equal to the Original Issue Price. The holders of preferred stock have preference in the event of liquidation or dissolution of the Company over the holders of common stock.