Calculation of Basic and Diluted Earnings per Share

3 Months Ended

Mar. 31, 2016

Earnings (loss) per common share:

Calculation of Basic and Diluted Earnings per Share

Note 5. Calculation of Basic and Diluted Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share:

(in thousands, except per share amounts)		Three Months Ended March 31,
		2016		2015
Numerator:
Net Income (Loss) - basic and diluted	$	244	$	(190)
Denominator:
Denominator for basic earnings (loss) per share - weighted-average shares		3,014		3,014
Effect of dilutive securities:
Employee stock options		1		-
Warrants		172		-
Dilutive potential common shares		173		-
Denominator for diluted earnings (loss) per share - weighted-average shares and assumed conversions		3,187		3,014
Basic earnings (loss) per common share	$	0.08	$	(0.06)
Diluted earnings (loss) per common share	$	0.08	$	(0.06)

For the three month period ended March 31, 2015, approximately 528,000 detachable warrants were excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. The warrants, issued in May 2009 with our six percent (6%) convertible subordinated debentures, have an exercise price of $2.65 and a maturity date of May 4, 2016.

For the three month period ended March 31, 2016, approximately 359,000 employee stock options were excluded from the calculation of diluted earnings per share as the exercise price was greater than the market price of the common shares and, therefore, the effect would be anti-dilutive.

For the three month period ended March 31, 2015, approximately 147,000 employee stock options were excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive.