Note 4 - Income Per Share

6 Months Ended

Jun. 30, 2015

Note 4 – Income Per Share

For periods with net income, net income per common share information is computed using the two-class method. Under the two-class method, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Basic net loss attributable to common stockholders is computed by an adjustment to subtract from net income the portion of current period earnings that the preferred shareholders would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the convertible preferred shares have no obligation to fund losses.

The Company’s calculation of earnings per share is as follows:

	Three Months Ended,						Six Months Ended,
	June 30,			June 30,			June 30,			June 30,
	2015			2014			2015			2014
Basic earnings per common share:
Net income applicable to common shareholders - basic	$	120,712		$	130,283		$	261,501		$	122,249
Portion allocable to common shareholders		99.2	%		99.2	%		99.2	%		99.2	%
Net income allocable to common shareholders		119,746			129,242			259,409			121,271
Weighted average basic shares outstanding		31,947,753			31,888,753			32,124,260			31,886,549
Basic earnings per share	$	-		$	-		$	0.01		$	-

Dilutive earnings per common share:
Net income allocable to common shareholders		119,746			129,242			259,409			121,271
Add: undistributed earnings allocated to participating securities		966			1,042			2,092			978
Numerator for diluted earnings per common share		120,712			130,283			261,501			122,249

Weighted average basic shares outstanding		31,947,753			31,888,753			32,124,260			31,886,549
Diluted effect:
Stock options		19,250			18,000			18,667			16,333
Unvested restricted stock awards		19,250			-			17,600			-
Conversion equivalent of dilutive Series B Convertible Preferred Stock		3,307,299			3,307,299			3,307,299			3,307,299
Conversion equivalent of dilutive Convertible Preferred Stock		255,000			255,000			255,000			255,000
Weighted average dilutive shares outstanding		35,548,552			35,469,052			35,722,826			35,465,181
Dilutive earnings per share	$	-		$	-		$	0.01		$	-

This table below sets forth the calculation of the percentage of net earnings allocable to common shareholders under the two-class method:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			201 4
Numerator:
Weighted average participating common shares		31,947,753			31,888,753			32,124,260			31,886,549
Denominator:
Weighted average participating common shares		31,947,753			31,888,753			32,124,260			31,886,549
Add: Weighted average shares of Convertible Preferred Stock		255,000			255,000			255,000			255,000
Weighted average participating shares		32,202,753			32,143,753			32,379,260			32,141,549
Portion allocable to common shareholders		99.2	%		99.2	%		99.2	%		99.2	%

Diluted earnings (loss) per share for the three and six months ended June 30, 2015 and 2014 does not reflect the following potential common shares, as the effect would be antidilutive.

	June 30, 2015		June 30, 2014
Stock options		610,000		610,000
Unvested portion of restricted stock		-		75,000
Convertible preferred stock		-		-
		610,000		685,000