Note 8 - Earnings Per Share

3 Months Ended

Sep. 30, 2011

8. Earnings (Loss) Per Share

Basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per common share include the potential dilution that would occur from common shares issuable upon the exercise of outstanding stock options and warrants and the conversion of preferred stock. There is no dilutive effect on earnings (loss) per share during loss periods. As of September 30, 2011, 6,242,315 shares of common stock were issuable upon the conversion or exercise of options, warrants and preferred stock. For the three months ended September 30, 2011 and 2010, there were 4,174,448 and 5,947,062 shares of common stock equivalents, respectively, excluded from the computation of diluted earnings (loss) per share because their effect would have been antidilutive.

The following summarizes the computations of basic and diluted earnings (loss) per common share for the three months ended September 30, 2011 and 2010:

	Three Months Ended September 30,
	2011			2010
Numerator for basic and diluted earnings per share:
Net income (loss)	$	402,000		$	(2,171,000	)
Payment and/or accretion of preferred stock dividends		(39,000	)		(398,000	)
Net income (loss) available to common stockholders	$	363,000		$	(2,569,000	)

Weighted average shares used in computing basic net income (loss) per share:		51,921,676			42,701,339
Effect of dilutive securities		216,432			—
Weighted average shares used in computing diluted net income (loss) per share:		52,138,10854			42,701,339

Income (loss) per common share, basic	$	0.01		$	(0.06	)
Income (loss) per common share, diluted	$	0.01		$	(0.06	)