Earnings Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share:

Earnings Per Share

7.     INCOME (LOSS) PER SHARE

Income (loss) per share is computed on the basis of the weighted average number of shares and common stock equivalents outstanding during the period.  In the calculation of diluted earnings per share, shares outstanding are adjusted to assume conversion of the Company’s non-interest bearing convertible stock and exercise of options as if they were dilutive.  In the calculation of basic income (loss) per share, weighted average numbers of shares outstanding are used as the denominator.

The Company had net income available to the common stockholders for the three and six months ended June 30, 2018 and a net loss allocable to stockholders for the three and six months ended June 30, 2018 and 2017. In the three and six months ended June 30, 2018, there were 179,000 of net additional dilutive stock options assumed to be converted into common stock shares and in the three and six months ended June 30, 2017, the outstanding stock options would have been antidilutive due to the net loss incurred during those periods.  In addition, 100% of the outstanding convertible preferred stock, 1,623,000 shares, were eligible to be converted into common stock. For purpose of this calculation, if converted, it was assumed that upon conversion, the related dividends were not paid. However, as of the three and six months ended June 30, 2018 and 2017 shares of common stock issuable on the assumed conversion of the eligible preferred stock were excluded from the diluted income (loss) per common shares calculation as the inclusion of these shares would have been antidilutive.

	Three Months Ended June 30,					Six Months Ended June 30,
		2018		2017				2018		2017
Numerator:
Net income (loss)	$	304,000	$	(227,000	)		$	310,000	$	(906,000	)
Preferred dividend		125,000		125,000				250,000		250,000
Net income available (loss allocable) to       common stockholders	$	179,000	$	(352,000	)		$	60,000	$	(1,156,000	)
Denominator:
Basic weighted average number of    common shares outstanding		3,594,000		3,954,000				3,594,000		3,954,000
Effect of dilutive stock options		179,000		-				179,000		-
Diluted weighted average number of    common shares outstanding		3,773,000		3,594,000				3,773,000		3,954,000
Basic income (loss) per common share	$	0.05	$	(0.10	)		$	0.02	$	(0.32	)
Diluted income (loss) per common share	$	0.05	$	(0.10	)		$	0.02	$	(0.32	)