Note T - Earnings Per Share (EPS)

12 Months Ended

Dec. 31, 2011

NOTE T—EARNINGS PER SHARE (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 years ended December 31, 2011 and 2010, diluted per share computations are not presented since this effect would be antidilutive.

The reconciliation of the numerator of the basic and diluted EPS calculations, due to the inclusion of preferred stock dividends, accretion, and gain on redemption, was as follows for the following fiscal years ended December 31:

	Years ended December 31,
	2011			2010
Basic Numerator:

Net loss from continuing operations	$	(1,897,606	)	$	(649,772	)
Convertible preferred stock dividends and accretion		-			(643,759	)
Loss available to common stockholders	$	(1,897,606	)	$	(1,293,531	)

Basic Denominator		78,155,413			77,901,103
Per Share Amount	$	(0.02	)	$	(0.02	)

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.

	Years ended December 31,
	2011		2010

Stock Options		379,865		640,535
Preferred Stock		-		10,185,667
Convertible Debt		-		2,419,597

Potentially dilutive securities		379,865		13,245,799

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

	Years ended December 31,
	2011		2010

Stock options		3,087,140		2,844,258
Warrants		8,250,000		10,261,615

Total		11,337,140		13,105,873

- Definition

The entire disclosure for earnings per share.

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