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EARNINGS PER SHARE
 6 Months Ended
Jun. 30, 2014
Notes to Financial Statements  
NOTE 6. EARNINGS PER SHARE

We compute basic earnings per share (“basic EPS”) by dividing the net loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding ( warrants and stock options). The following table provides the computation of basic and diluted earnings per share for the three and six month periods ending June 30, 2014 and 2013.

 

   Three Months Ended June 30,  Six Months Ended June 30,
(in thousands, except EPS)  2014  2013  2014  2013
             
Net income (loss)  $29   $(1,119)  $(9,782)  $(1,529)
                     
Basic weighted average shares outstanding   17,717    17,669    17,667    17,660 
Effect of potential dilutive securities   3,459    —      —      —   
Diluted weighted average shares outstanding   21,176    17,669    17,667    17,660 
                     
Basic earnings (loss) per share  $0.00   $(0.06)  $(0.55)  $(0.09)
                     
Diluted earnings (loss) per share  $(0.07)  $(0.06)  $(0.55)  $(0.09)

 

For the three months ended June 30, 2014, options and warrants to purchase approximately 3,459,000 shares of common stock and approximately $1,454,000 of the gain on the fair market valuation of the derivative liabilities were included  in the computation of diluted earnings per share because their effects were dilutive, while the conversion of Series A Preferred Stock into 3,500,000 shares of common stock were excluded from the computation of diluted earnings per share as the effect is anti-dilutive.

 

For the six months ended June 30, 2014, and June 30 2013 and the three months ended June 30, 2013 options and warrants to purchase shares of common stock and Series A Preferred Stock were excluded in the computation of diluted earnings per share because their effects were anti-dilutive.