Note B - Summary of Significant Accounting Policies: Earnings Per Share, Policy (Policies)

12 Months Ended

Dec. 31, 2012

Policies

Earnings Per Share, Policy

Income (loss) per share – basic is calculated by dividing net income by the weighted average number of shares of stock outstanding during the year, including shares issuable without additional consideration. Income per share – assuming dilution is calculated by dividing net income by the weighted average number of shares outstanding during the year adjusted for the effect of dilutive potential shares calculated using the treasury stock method.

Schedule of Income (Loss) Per Share
	2012		2011
Numerator:
Net income (loss)		$ (189,613)		$    65,330
Denominator:
Weighted average shares and share equivalents outstanding – basic		9,087,828		8,316,517
Effect of dilutive stock options		58,024		129,658
Effect of dilutive warrants		293,712		819,116
Effect of dilutive convertible promissory notes		-		-
Weighted average shares and share equivalents outstanding – assuming dilution		9,439,564		9,265,291
Net income (loss) per share — basic		$         (.02)		$           .01
Net income (loss) per share — assuming dilution		$         (.02)		$           .01

Basic and diluted loss per share were the same for the year ended December 31, 2012 because there was a net loss for the year. 

Stock options exercisable for the purchase of 1,045,216 and 1,263,783 common stock shares at exercise prices ranging from $.04 to $.14 per share, respectively, were outstanding for the years ended December 31, 2012 and 2011, but were not included in the calculation of income (loss) per share – assuming dilution because the options were not dilutive.

Warrants exercisable for the purchase of 140,000 common stock shares at an exercise price of $.01 per share were outstanding for the year ended December 31, 2012 and warrants exercisable for the purchase of 96,000 common stock shares at exercise prices ranging from $.08 to $.13 per share were outstanding for the year ended December 31, 2011, but were not included in the calculation of income (loss) per share – assuming dilution because the warrants were not dilutive.

A convertible promissory note convertible into 107,843 common stock shares at a conversion price of $.51 per share (see Note D - Notes Payable) was outstanding for the years ended December 31, 2012 and 2011, but was not included in the calculation of income (loss) per share – assuming dilution because the convertible note was not dilutive.