11. Net income (loss) per common share

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

11. Net income (loss) per common share

11. Net income (loss) per common share

Basic income (loss) per share is based on the weighted-average number of common shares outstanding during each period. Diluted income (loss) per share is based on basic shares as determined above plus the incremental shares that would be issued upon the assumed exercise of “in-the-money” stock options and warrants using the treasury stock method and the inclusion of all convertible securities, including preferred stock and convertible notes, assuming these securities were converted at the beginning of the period or at the time of issuance, if later. The computation of diluted net income (loss) per share does not assume the issuance of common shares that have an anti-dilutive effect on net income (loss) per share.

For the three months ended March 31, 2016 the computation of basic and diluted earnings per share is as follows:

	Income		Number of shares		Per share amount
Net income	$	143,530
Basic earnings per share		143,350		47,738,855	$	0.00
Effect of dilutive securities
Warrants		—		266,700
Options		—		—
Diluted earnings per share	$	143,350		48,005,555	$	0.00

For the three months ended March 31, 2016, options to purchase 480,000 shares of common stock and warrants to purchase 1,500,000 shares of common stock were excluded from the calculation of diluted earnings per share as the option and warrant exercise prices were greater than the average market price of the common shares.

For the three months ended March 31, 2015, the following options and warrants and convertible preferred stock were excluded from the computation of diluted net loss per shares as the result of the computation was anti-dilutive:

	Three months ended March 31, 2015
Options to purchase shares of common stock	$	480,000
Warrants to purchase shares of common stock		6,300,000
Outstanding at March 31, 2015	$	6,780,000