8.	(LOSS) EARNINGS PER SHARE

(Loss) earnings 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 (loss) earnings e per share, weighted average numbers of shares outstanding are used as the denominator.

The Company had net loss allowable to the common stockholders for the three and six months ended June 30, 2019 and net income available to stockholders for the three and six months ended June 30, 2018. 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, 2019, 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, 2019 and 2018 shares of common stock issuable on the assumed conversion of the eligible preferred stock were excluded from the diluted earnings per common shares calculation as the inclusion of these shares would have been antidilutive.

	Three Months Ended Ended June 30,					Six Months Ended Ended June 30,

	2019			2018		2019			2018
Numerator:
Net (loss) income	$	(586,000	)	$	304,000	$	(531,000	)	$	310,000
Preferred dividend		125,000			125,000		250,000			250,000
Net (loss) income available to common stockholders	$	(711,000	)	$	179,000	$	(781,000	)	$	60,000
Denominator:
Basic weighted average number of common shares outstanding		3,617,000			3,594,000		3,617,000			3,594,000
Effect of dilutive stock options		-			179,000		-			179,000
Diluted weighted average number of common shares outstanding		3,617,000			3,773,000		3,617,000			3,773,000
Basic earnings per common share	$	(0.20	)	$	0.05	$	(0.22	)	$	0.02
Diluted earnings per common share	$	(0.20	)	$	0.05	$	(0.22	)	$	0.02