Note 8 – Earnings (Loss) Per Common Share

Basic earnings (loss) per common share is computed by dividing the net income or loss attributable to common shares by the weighted average number of common shares outstanding. Diluted earnings per common share adjusts basic earnings per share for the effects of common stock options, common stock warrants, convertible preferred stock and other potential dilutive common shares outstanding during the periods.

For purposes of computing diluted earnings per share for the three and nine months ended June 30, 2017 and 2016, no common stock options were included in the calculation of dilutive shares as all of the 196,769 and 123,147 common stock options outstanding, respectively, had exercise prices above the applicable quarterly average market price per share and their inclusion would be anti-dilutive.

For the three and nine months ended June 30, 2017, 70,000 shares of restricted common stock were excluded from the calculation of dilutive shares, as the effect of their inclusion would be anti-dilutive. For the three and nine months ended June 30, 2016, 3,532 and 42,737 shares of common stock, respectively, related to restricted stock were included in the denominator used to calculate diluted earnings per share. Additionally, for the three months ended June 30, 2017, no common share equivalents related to stock options or unvested restricted stock were included in the calculation of dilutive shares, since there was a loss attributable to common shareholders and the inclusion of common share equivalents would be anti-dilutive.

The computation of the weighted shares outstanding for the three months ended June 30, 2017 and 2016 is as follows:

	June 30, 2017		June 30, 2016
Weighted average shares outstanding
Basic		16,945,744		16,698,205
Effect of dilutive securities
Stock options		-		-
Restricted stock		-		3,532
Dilutive average shares outstanding		16,945,744		16,701,737

The computation of the weighted shares outstanding for the nine months ended June 30, 2017 and 2016 is as follows:

	June 30, 2017		June 30, 2016
Weighted average shares outstanding
Basic		16,879,864		16,628,279
Effect of dilutive securities
Stock options		-		-
Restricted stock		-		42,737
Dilutive average shares outstanding		16,879,864		16,671,016