INCOME (LOSS) PER SHARE

9 Months Ended

Jun. 30, 2015

INCOME (LOSS) PER SHARE

We compute basic income (loss) per share using the weighted average number of common shares outstanding.

The Company has three categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the registered direct offering, the Warrants issued in connection with the same offering in May 2011, and shares issuable upon exercise of options. We compute diluted earnings per share using the if-converted method for preferred stock and the treasury stock method for stock options and warrants. Shares issuable upon exercise of options, warrants for 799 common shares and 592 common shares issuable upon conversion of preferred shares were not considered in computing diluted earnings per share for the nine months ended June 30, 2014 because they were anti-dilutive.

The following table reconciles our computation of basic net income (loss) per share to diluted net loss per share:

	Three Months Ended June 30,						Nine Months Ended June 30,
	2015			2014			2015			2014

Basic net income (loss) per share:

Net income (loss) applicable to common shareholders	$	1,477		$	215		$	1,810		$	(666	)
Weighted average common shares outstanding		8,080			8,068			8,077			7,922

Basic net income (loss) per share	$	0.18		$	0.03		$	0.22		$	(0.08	)

Diluted net income (loss) per share:

Net income (loss) applicable to common shareholders	$	1,477		$	215		$	1,810		$	(666	)
Change in fair value of warrant liability		(34	)		(66	)		(353	)		-

Diluted net income (loss) applicable to common shareholders	$	1,443		$	149		$	1,457		$	(666	)

Weighted average common shares outstanding		8,080			8,068			8,077			7,922
Plus: Incremental shares from assumed conversions:
Series A preferred shares		592			592			592			-
Class A warrants		15			200			48			-
Stock options/shares		123			155			128			-

Diluted weighted average common shares outstanding		8,810			9,015			8,845			7,922

Diluted net income (loss) per share:	$	0.16		$	0.02		$	0.16		$	(0.08	)