7. Earnings Per Share

Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is derived by dividing net earnings available to common stockholders by the weighted-average number of shares outstanding after adjusting for the dilutive effect of common shares that could be issued upon the exercise or conversion of common stock equivalents, such as stock options and convertible preferred stock. As of March 31, 2015, 3,021,093 shares of common stock were issuable upon the conversion or exercise of options and preferred stock. For the three months ended March 31, 2015 and 2014, there were 0 and 213,500 shares of common stock equivalents, respectively, excluded from the computation of diluted earnings per share because their effect would have been antidilutive. For the nine months ended March 31, 2015 and 2014, there were 102,250 and 313,500 shares of common stock equivalents, respectively, excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

The following tables summarize the computations of basic and diluted earnings per common share for the three and nine months ended March 31, 2015 and 2014:

	Three Months Ended March 31,
	2015			2014
Numerator for basic and diluted earnings per share:
Net income from continuing operations	$	1,857,000		$	2,756,000
Payment of preferred stock dividends		(22,000	)		(27,000	)
Net income from continuing operations available to common stockholders		1,835,000			2,729,000
Loss from discontinued operations, net of tax		—			(528,000	)
Loss on sale of discontinued operations, net of tax		(51,000	)
Net income available to common stockholders	$	1,784,000		$	2,201,000

Weighted average shares used in computing basic net income per share:		29,597,525			54,264,017
Assumed conversion of preferred stock		1,727,768			2,095,784
Effect of outstanding stock options		710,234			877,526
Weighted average shares used in computing diluted net income per share:		32,035,527			57,237,327

Earnings per common share attributable to common stockholders – basic
Income from continuing operations per common share	$	0.06		$	0.05
Loss from discontinued operations per common share		—			(0.01	)
Earnings per common share attributable to common stockholders – basic	$	0.06		$	0.04

Earnings per common share attributable to common stockholders – diluted
Income from continuing operations per common share	$	0.06		$	0.05
Loss from discontinued operations per common share		—			(0.01	)
Earnings per common share attributable to common stockholders – diluted	$	0.06		$	0.04

	Nine Months Ended March 31,
	2015			2014
Numerator for basic and diluted earnings per share:
Net income from continuing operations	$	3,225,000		$	5,034,000
Payment of preferred stock dividends		(74,000	)		(82,000	)
Net income from continuing operations available to common stockholders		3,151,000			4,952,000
Loss from discontinued operations, net of tax		(684,000	)		(1,520,000	)
Loss on sale of discontinued operations, net of tax		(1,485,000	)		(374,000	)
Net income available to common stockholders	$	982,000		$	3,058,000

Weighted average shares used in computing basic net income per share:		41,021,199			54,122,392
Assumed conversion of preferred stock		1,727,768			2,095,784
Effect of outstanding stock options		542,715			716,773
Weighted average shares used in computing diluted net income per share:		43,291,682			56,934,949

Earnings per common share attributable to common stockholders – basic
Income from continuing operations per common share	$	0.08		$	0.09
Loss from discontinued operations per common share		(0.05	)		(0.04	)
Earnings per common share attributable to common stockholders – basic	$	0.03		$	0.05

Earnings per common share attributable to common stockholders – diluted
Income from continuing operations per common share	$	0.07		$	0.09
Loss from discontinued operations per common share		(0.05	)		(0.04	)
Earnings per common share attributable to common stockholders – diluted	$	0.02		$	0.05