3. Net Income/(Loss) Attributable to Common Stockholders

We present basic earnings (loss) per share (“EPS”) in accordance with ASC 260. Under ASC 260, basic EPS is the amount of earnings available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options, convertible preferred stock and warrants. Potentially dilutive common shares are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive.

We calculate EPS using the two-class method. The two-class method allocates earnings that otherwise would have been available to common shareholders to holders of participating securities. We consider all series of our convertible preferred stock to be participating securities due to their non-cumulative dividend rights. As such, earnings allocated to these participating securities, which include participation rights in undistributed earnings (see Note 7 – Preferred Stock), are subtracted from net income to determine total undistributed earnings to be allocated to common stockholders. All participating securities are excluded from basic weighted-average common shares outstanding.

The following is a reconciliation of basic EPS to diluted EPS for the three and nine months ended September 30, 2013 and 2012 respectively:


	Three Months Ended September 30,					Nine Months Ended September 30,
($ in thousands, except EPS)	2013		2012			2013		2012
Net income/(loss)	$	2,713	$	(882	)	$	4,450	$	(6,030	)
Less: Earnings allocated to participating securities⁽¹⁾	$	2,713	$	—		$	4,450	$	—
Net income/(loss) available to common shareholders after required adjustments for the calculation of basic and diluted earnings per common share	$	—	$	(882	)	$	—	$	(6,030	)

Basic weighted average common shares outstanding		13,328,103		10,300,351			12,614,487		9,739,922
Weighted average effect of dilutive securities:
Preferred Stock		60,026,463		—			59,941,389		—
Stock Options		6,482,703		—			6,792,704		—
Warrants		509,163		—			811,956		—

Diluted weighted average common shares outstanding		80,346,432		10,300,351			80,160,536		9,739,922
Earnings per common share
Basic	$	—	$	(0.09	)	$	—	$	(0.62	)
Diluted	$	—	$	(0.09	)	$	—	$	(0.62	)

(1)	In a period with net income, both earnings and dividends (if any) are allocated to participating securities. In a period with a net loss, only dividends (if any) are allocated to participating securities.

The following table summarizes the equity shares excluded from the dilutive EPS calculation as they were deemed to be antidilutive for the three and nine months ended September 30, 2013 and 2012 respectively:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Excluded Securities:
Stock Options		1,148,679		8,566,158		600,451		8,353,549
Convertible Preferred Stock		—		58,905,918		—		58,905,918
Warrants		—		1,519,717		—		1,519,717

Total		1,148,679		68,991,793		600,451		68,779,184