Earnings Per Share

9 Months Ended

Oct. 31, 2014

Earnings Per Share

Basic earnings per share is calculated by dividing net loss income available to common stockholders by the weighted average number of common shares outstanding without consideration of common stock equivalents, but including contingently issuable shares. Diluted earnings per share are based on the weighted average number of common and common stock equivalents, that are not deemed anti-dilutive. The diluted earnings per share calculation takes into account the shares that may be issued upon exercise of stock options, or warrants reduced by the shares that may be repurchased with the funds received from their exercise, based on the average price during the period.

The following table sets forth the computation of basic and diluted earnings (loss) per share at October 31, 2014 and 2013.

	Three Months Ended				Nine Months Ended
	October 31,				October 31,
	2014		2013		2014		2013
Numerator:
Net income (loss)	$	(2,500,230)	$	(1,835,480)	$	(2,885,895)	$	1,491,439
Denominator
Denominator for basic income (loss) per share
Weighted-average shares outstanding before common share equivalents		5,592,559		5,353,238		5,436,959		5,345,610
Weighted average common equivalent shares resulting from the warrant issued June 28, 2013 to the subordinated debt lender LKL Investments LLC		359,054		566,015		496,270		262,044
Total weighted average, including common equivalent shares		5,951,613		5,919,253		5,933,229		5,607,654
Effect of dilutive securities from restricted stock plan and from dilutive effect of stock options		——		——		——		107,497
Denominator for diluted loss per share (adjusted weighted average shares)		5,951,613		5,919,253		5,933,229		5,715,151
Basic income (loss) per share	$	(0.42)	$	(0.31)	$	(0.49)	$	0.27
Diluted income (loss) per share	$	(0.42)	$	(0.31)	$	(0.49)	$	0.26

- Definition

The entire disclosure for earnings per share.

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