Note 5 - Earnings (Loss) Per Share Common Stock (EPS)

9 Months Ended

Sep. 30, 2011

5. EARNINGS (LOSS) PER SHARE COMMON STOCK (“EPS”)

The Company’s basic EPS is calculated using net income (loss) available to common shareholders and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and warrants and the assumed conversion of convertible notes and preferred stock. For the three and nine months ended September 30, 2011 and 2010, diluted per share computations are not presented since this effect would be antidilutive.

The reconciliation of the numerators of the basic and EPS calculations, due to the inclusion of preferred stock dividends and accretion was as follows for both of the following three and nine month periods ended September 30:

	Three Months ended September 30,						Nine Months ended September 30,
	2011			2010			2011			2010

Basic Numerator:

Net loss from continuing operations	$	(540,165	)	$	(931,697	)	$	(894,319	)	$	(122,642	)
Convertible preferred stock dividends and accretion		-			(162,263	)		-			(481,497	)
Loss available to common stockholders	$	(540,165	)	$	(1,093,960	)	$	(894,319	)		(604,139	)

Basic Denominator		78,155,413			78,016,082			78,155,413			77,815,401
Per Share Amount	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.01	)

The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010

Preferred Stock		-		10,185,667		-		10,185,667
Convertible Debt		-		2,366,260		-		2,366,260
Stock Options		279,978		557,272		473,652		674,641
Potentially dilutive securities		279,978		13,109,199		473,652		13,226,568

Items excluded from the diluted per share calculation because the exercise price was greater than the average market price of the common shares:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010

Stock options		3,372,140		3,039,258		2,527,140		2,844,258
Warrants		8,250,000		15,369,948		8,250,000		15,369,948
Total		11,622,140		18,409,206		10,777,140		18,214,206