INCOME (LOSS) PER SHARE

3 Months Ended

Dec. 31, 2015

4.	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 a 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, 2015 because they were anti-dilutive. Warrants for 799 common shares and 592 common shares issuable upon conversion of preferred shares were not considered in computing diluted earnings per share for the quarter ended December 31, 2015 because they were also anti-dilutive.

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

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	Three Months Ended
	December 31,
	2015		2014

Basic net income (loss) per share:
Net income (loss) applicable to common shareholders	$	(506)	$	182
Weighted average common shares outstanding		8,107		8,076
Basic net income (loss) per share	$	(0.06)	$	0.02

Diluted net income (loss) per share:
Net income (loss) applicable to common shareholders	$	(506)	$	182
Change in Fair Value of Warrant Liability		—		(120)
Diluted net income (loss) applicable to common shareholders	$	(506)	$	62

Weighted average common shares outstanding		8,107		8,076
Plus: Incremental shares from assumed conversions
Series A preferred shares		—		592
Class A warrants		—		799
Dilutive stock options/shares		—		134
Diluted weighted average common shares outstanding		8,107		9,601

Diluted net income (loss) per share	$	(0.06)	$	0.01