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Note 8 - Basic and Diluted Earnings Per Common Share
 6 Months Ended
Jun. 30, 2011
Earnings Per Share Policy, Diluted
8. BASIC AND DILUTED EARNINGS PER COMMON SHARE:

Basic earnings per common share has been calculated by dividing net income for the period by the weighted average number of common shares outstanding during each period. Diluted earnings per share has been calculated by dividing net income for the period by the weighted average number of common shares and potentially dilutive common shares outstanding during the period. In computing diluted earnings per share, the treasury stock method is used to determine the number of shares assumed to be purchased from the conversion of common shares equivalents or the proceeds of option exercises.

The following table is a summary of the basic and diluted earnings per common share:

   
Three months
ended
June 30, 2011
   
Three months
ended
June 30, 2010
   
Six months
ended
June 30, 2011
   
Six months
ended
June 30, 2010
 
Numerator for basic and diluted earnings (loss) per common share:
                       
Net income (loss) for the period
  $ 565,659     $ (771,778 )   $ 1,293,605     $ (202,912 )
Denominator for basic and diluted earnings (loss) per common share:
                               
Basic weighted average number of common shares outstanding
    53,441,841       59,193,180       53,441,276       60,223,815  
Effect of outstanding stock options
    2,354,594       —       2,343,722       —  
Diluted weighted average number of shares outstanding
    55,796,435       59,193,180       55,784,998       60,223,815  
Basic earnings (loss) per common share
  $ 0.01     $ (0.01 )   $ 0.02     $ 0.00  
Diluted earnings (loss) per common share
  $ 0.01     $ (0.01 )   $ 0.02     $ 0.00  

For the three months ended June 30, 2011, outstanding options to purchase 2,466,250 shares were not included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares and as a result are considered anti-dilutive. During the three months ended June 30, 2010, outstanding options to purchase 2,837,750 common shares were not included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares. For the three months ended June 30, 2010, 2,028,478 shares underlying potentially dilutive securities of were excluded from the computation of diluted weighted average number of shares outstanding as they were anti-dilutive to the basic loss per share.

For the six months ended June 30, 2011, outstanding options to purchase 2,466,250 shares were not included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares and as a result are considered anti-dilutive. During the six months ended June 30, 2010, outstanding options to purchase 2,837,750 common shares were not included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares. For the six months ended June 30, 2010, 2,054,771 shares underlying potentially dilutive securities were excluded from the computation of diluted weighted average number of shares outstanding as they were anti-dilutive to the basic loss per share.

During the three and six months ended June 30, 2010, 2,453,300 and 3,409,300 common shares were repurchased and cancelled, respectively, under the terms of our stock repurchase program announced in February 2010.

The computation of earnings per share and diluted earnings per share for the three and six months ended June 30, 2010 includes reductions in the number of shares outstanding due to these repurchases (see note 11). No common shares were repurchased during the three or six months ended June 30, 2011.