Net Income per Share

9 Months Ended

Sep. 30, 2016

4. Net Income per Share

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share information):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net income	$	5,545	$	7,374	$	16,766	$	15,437
Basic:
Weighted-average shares of common stock outstanding		34,128		33,498		34,040		33,292
Shares used in computing basic net income per share		34,128		33,498		34,040		33,292
Effect of dilutive securities:
Stock options		-		-		-		1
Restricted stock subject to vesting		479		368		468		409
Contingently issuable shares (1)		-		-		2		-
Shares issuable for acquisition consideration (2)		470		321		502		461
Shares used in computing diluted net income per share		35,077		34,187		35,012		34,163

Basic net income per share	$	0.16	$	0.22	$	0.49	$	0.46
Diluted net income per share	$	0.16	$	0.22	$	0.48	$	0.45

Anti-dilutive options and restricted stock not included in the calculation of diluted net income per share		-		3		-		37

(1)	For the nine months ended September 30, 2016, this represents the shares issued to Zeon Solutions Incorporated and certain related entities (collectively, "Zeon") pursuant to the Asset Purchase Agreement.

(2)

For the three and nine months ended September 30, 2016, this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. ("BioPharm"); (ii) the Asset Purchase Agreement with Zeon; (iii) the Stock Purchase Agreement for Market Street Solutions, Inc. ("Market Street"); and (iv) the Asset Purchase Agreement with The Pup Group, Inc. ("Enlighten") as part of the consideration. For the three and nine months ended September 30, 2015, this represents the shares held in escrow pursuant to: (i) the Agreement and Plan of Merger with ForwardThink Group Inc.; (ii) the Asset Purchase Agreement with BioPharm; (iii) the Asset Purchase Agreement with Trifecta Technologies, Inc. and Trifecta Technologies Canada, Limited; (iv) the Asset Purchase Agreement with Zeon; and (v) the Stock Purchase Agreement for Market Street as part of the consideration.