INCOME (LOSS) PER SHARE

3 Months Ended

Dec. 31, 2011

INCOME (LOSS) PER SHARE

3. INCOME (LOSS) PER SHARE

We compute basic income (loss) per share using the weighted average number of common shares outstanding. 

The Company has three categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the registered direct offering, the Warrants issued in connection with the same offering in May 2011, and shares issuable upon exercise of options. We compute diluted earnings per share using the if-converted method for preferred stock and the treasury stock method for stock options and warrants. Shares issuable upon exercise of options were not considered in computing diluted earnings per share for the quarter ended December 31, 2011 because they were anti-dilutive. Warrants for 2,753 common shares and 1,068 common shares issuable upon conversion of preferred shares were not considered in computing diluted earnings per share for the quarter ended December 31, 2011 because they were also anti-dilutive. 

The following table reconciles our computation of basic income (loss) per share to diluted income (loss) per share: 

	Three Months Ended December 31,
	2011			2010
Basic net income (loss) per share:
Net income (loss) applicable to common shareholders	$	(1,491	)	$	310
Weighted average common shares outstanding		6,946			4,915
Basic net income (loss) per share	$	(0.21	)	$	0.06
Diluted net income (loss) per share:
Diluted net income (loss) applicable to common shareholders	$	(1,491	)	$	310
Weighted average common shares outstanding		6,946			4,915
Dilutive stock options/shares		—			66
Diluted weighted average common shares outstanding		6,946			4,981
Diluted net income (loss) per share	$	(0.21	)	$	0.06