Earnings Per Share

3 Months Ended

Dec. 31, 2020

5. Earnings Per Share


	Three Months Ended December 31,
	2020		2019
Numerator:
Net income	$	240,145	$	327,908
Denominator:
Basic weighted average shares		17,214,384		16,909,036
Dilutive effect of share-based awards		1,903		172,542
Diluted weighted average shares		17,216,287		17,081,578

Earnings per common share:
Basic EPS	$	0.01	$	0.02
Diluted EPS	$	0.01	$	0.02

Net income per share is calculated pursuant to ASC Topic 260, “Earnings per Share” (“ASC Topic 260”). Basic earnings per share (“EPS”) excludes potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed assuming the conversion or exercise of all dilutive securities such as employee stock options and restricted stock units (“RSUs”).

The number of incremental shares from the assumed exercise of stock options and RSUs is calculated by using the treasury stock method. As of December 31, 2020 and 2019, there were 104,500 and 550,834 options to purchase common stock outstanding, respectively, and no shares subject to vesting of restricted stock units outstanding, respectively. The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period.

For the three months ended December 31, 2020 and 2019, respectively, 100,000 and 0 diluted weighted-average shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive.