INCOME (LOSS) PER SHARE

9 Months Ended

Jun. 30, 2016

4. INCOME (LOSS) PER SHARE

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

During the three and nine month period ended June 30, 2015 and 2016, respectively, the Company had three categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the Company’s registered direct offering, the warrants issued in connection with the same offering in May 2011 (which expired in May, 2016), 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, 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 three and nine months ended June 30, 2016, respectively, because they were anti-dilutive.

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

	Three Months Ended June 30,				Nine Months Ended June 30,
	2016		2015		2016		2015
Basic net income (loss) per share:
Net income (loss) applicable to common shareholders	$	(433)	$	1,478	$	(1,193)	$	1,810
Weighted average common shares outstanding		8,108		8,080		8,107		8,077
Basic net income (loss) per share	$	(0.05)	$	0.18	$	(0.15)	$	0.22
Diluted net income (loss) per share:
Net income (loss) applicable to common shareholders	$	(433)	$	1,478	$	(1,193)	$	1,810
Change in Fair Value of Warrant Liability		—		(34)		—		(353)
Diluted net income (loss) applicable to common shareholders	$	(433)	$	1,444	$	(1,193)	$	1,457

Weighted average common shares outstanding		8,108		8,080		8,107		8,077
Plus: Incremental shares from assumed conversions
Series A preferred shares		—		592		—		592
Class A warrants		—		15		—		48
Dilutive stock options/shares		—		123		—		128
Diluted weighted average common shares outstanding		8,108		8,810		8,107		8,845
Diluted net income (loss) per share	$	(0.05)	$	0.16	$	(0.15)	$	0.16