INCOME (LOSS) PER SHARE

3 Months Ended

Dec. 31, 2016

4.	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 were not considered in computing diluted income (loss) per share for the three months ended December 31, 2016 because they were anti-dilutive.

Shares issuable upon exercise of 229 vested options were not considered in computing diluted income (loss) per share for the three months 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:

	Three Months Ended
	December 31,
	2016		2015

Basic net income (loss) per share:
Net income (loss) applicable to common shareholders	$	17	$	(506)
Weighted average common shares outstanding		8,107		8,107
Basic net income (loss) per share	$	0.00	$	(0.06)

Diluted net income (loss) per share:
Diluted net income (loss) applicable to common shareholders	$	17	$	(506)
Weighted average common shares outstanding		8,107		8,107
Plus: Incremental shares from assumed conversions Series A preferred shares		592		—
Diluted weighted average common shares outstanding		8,699		8,107
Diluted net income (loss) per share	$	0.00	$	(0.06)