INCOME (LOSS) PER SHARE

12 Months Ended

Sep. 30, 2016

INCOME (LOSS) PER SHARE

We compute basic income (loss) per share using the weighted average number of common shares outstanding. The Company has two categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the registered direct offering 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, respectively. Shares issuable upon exercise of 209 vested options and 592 common shares issuable upon conversion of preferred shares were not considered in computing diluted income (loss) per share for the year ended September 30, 2016, 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:

	Years Ended September 30,
	2016		2015
Basic net income (loss) per share:
Net (loss) income applicable to common shareholders	$	(3,230)	$	1,099
Weighted average common shares outstanding		8,107		8,084
Basic net (loss) income per share	$	(0.40)	$	0.14


Diluted net income (loss) per share:
Net (loss) income applicable to common shareholders	$	(3,230)	$	1,099
Change in fair value of warrant liability		—		(487)
Diluted net (loss) income applicable to common shareholders	$	(3,230)	$	612

Weighted average common shares outstanding		8,107		8,084
Plus: Incremental shares from assumed conversions:
Series A preferred shares		—		593
Class A warrants		—		4
Dilutive stock options/shares		—		110
Diluted weighted average common shares outstanding		8,107		8,791
Diluted net (loss) income per share	$	(0.40)	$	0.07