11.

Loss Per Share

Basic loss per common share is based on the weighted average number of common shares outstanding in each period and earnings adjusted for preferred stock dividend requirements. Diluted earnings per common share assumes that any dilutive convertible preferred shares outstanding at the beginning of each period were converted at those dates, with related interest, preferred stock dividend requirements and outstanding common shares adjusted accordingly. It also assumes that outstanding common shares were increased by shares issuable upon exercise of those stock options and warrants for which market price exceeds exercise price, less shares which could have been purchased by the Company with related proceeds. The convertible preferred stock and outstanding stock options and warrants were not included in the computation of diluted earnings per common share for the six months ended June 30, 2013 and 2012, respectively since it would have resulted in an antidilutive effect.

The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share data):

	Three Months Ended				Six Months Ended
			June 30 ,		June 30 ,
	June 30 , 2013		2012		2013		June 30 , 2012
Numerator
Basic and diluted loss	$	(1,088)	$	(1,235)	$	(2,287)	$	(3,570)

Denominator
Basic and diluted earnings per share - weighted average shares outstanding		1,452,177		1,256,915		1,452,177		1,123,374

Basic and diluted loss per common share	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)

Anti-dilutive securities (based on conversions to common shares) not included in net loss per share calculation (in thousands):

	June 30, 2013		June 30, 2012
Convertible Series A preferred stock		441		441
Convertible Series B preferred stock		305,649		424,532
Convertible Series G preferred stock		-		100
Convertible Series S preferred stock		1,000,000		1,000,000
Convertible Series H preferred stock		142,857		-
Stock warrants		267,350		208,850
Convertible debt		850,115		258,601
Common stock options		190,600		177,600
Series B preferred stock options		250,000		250,000