NET INCOME (LOSS) PER COMMON SHARE

9 Months Ended

Sep. 30, 2011

Net Income Loss Per Common Share

NOTE 4. NET INCOME (LOSS) PER COMMON SHARE

Basic income (loss) per common share is calculated by dividing net income (loss) available to common shareholders for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income available to common shareholders for the period by the weighted-average number of common shares outstanding during the period, adjusted to include, if dilutive, potential dilutive shares consisting of convertible preferred stock, convertible notes payable, stock options and warrants, calculated using the treasury stock method. For diluted earnings per share calculation purposes, the net income available to commons shareholders is adjusted to add back any preferred stock dividends and any interest on convertible debt reflected in the condensed consolidated statement of operations for the respective periods.

The table below presents the computation of basic and diluted earnings income (loss) per share:

(Amounts in thousands except share and per share amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Numerator for basic earnings (loss) per share:
Net income (loss)	$	5,395		$	(1,117	)	$	1,059		$	1,070
Preferred dividends		(99	)		(99	)		(301	)		(296	)
Net income (loss) available to common shareholders	$	5,296		$	(1,216	)	$	758		$	774
Numerator for diluted earnings (loss) per share:
Net income (loss) available to common shareholders	$	5,296		$	(1,216	)	$	758		$	774
Preferred dividends		99			—			301			296
Interest expense on convertible debt		93			—			261			6
Net income (loss) for diluted earnings (loss) per share	$	5,488		$	(1,216	)	$	1,320		$	1,076
Denominator for basic earnings (loss) per share — weighted-average shares outstanding		26,328,062			23,753,994			25,816,120			22,916,554
Effect of dilutive securities		30,838,150			—			33,177,845			14,907,951
Denominator for diluted earnings (loss) per share — weighted-average shares outstanding		57,166,212			23,753,994			58,993,965			37,824,505
Basic income (loss) per share:
Net income (loss)	$	0.20		$	(0.05	)	$	0.04		$	0.04
Preferred dividends		(0.00	)		(0.00	)		(0.01	)		(0.01	)
Net income (loss) available to common shareholders	$	0.20		$	(0.05	)	$	0.03		$	0.03
Diluted income (loss) per share:
Net income (loss)	$	0.10		$	(0.05	)	$	0.02		$	0.03

The Company has excluded the following securities from the calculation of diluted loss per share, as their effect would have been antidilutive:

Dilutive securities	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Convertible notes payable		—		226,236		—		—
Convertible preferred stock		57,490		10,982,759		56,584		52,954
Stock options		603,930		942,721		135,342		879,199
Warrants		1,254,029		11,730,948		812,925		1,426,779
Total dilutive securities		1,915,449		23,882,664		1,004,851		2,358,932