Shareholders' Equity

6 Months Ended

Jun. 30, 2011

Shareholders' Equity [Abstract]

Shareholders' Equity

5. Shareholders' Equity

Common Stock and Option Issuances

Other than the 111,000 shares of restricted stock granted to directors of the Company, as set forth in Note 3, the Company has not issued any shares during the six months ended June 30, 2011.

During the six months ended June 30, 2010 the Company issued 135,000 restricted common shares with a fair value of $284,000 based on the closing share price on the date of the grant to certain officers under employment agreements.  The Company also issued 109,276 shares on exercise of 220,000 options on a cashless basis.  In addition, the Company considers outstanding 63,016 common shares held in deferred compensation accounts for directors.

During the six months ended June 30, 2011, the company granted 55,000 options to employees with an exercise price of $1.20, the trading price on the date of the grant.  The options have a fair value of $40,000 determined using the Black-Sholes pricing model.  The key assumptions used were a volatility of 103.0%, a dividend rate of 0%, a risk free rate of 0.62%, and an expected life of 2.5 years. No options were issued during the six months ended June 30, 2010.

Earnings Per Share

The Company displays earnings per share in accordance with ASC 260, “Earnings Per Share”.  ASC 260 requires dual presentation of basic and diluted earnings per share (“EPS”).  Basic EPS includes no dilution and is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period.

Diluted EPS includes the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  Outstanding stock options, warrants and other potential stock issuances are not included in the computation when their effect would be anti-dilutive.  The following table presents the shares used in the computation of diluted earnings per share for the three and six months ended June 30, 2011 and 2010 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Weighted Average Common shares outstanding		11,718		11,430		11,705		11,356
Options to purchase common stock		--		200		--		232
Restricted stock grants		--		5		--		6
Total diluted shares		11,718		11,635		11,705		11,594

Securities that could potentially dilute basic EPS in the future, that were not included in the computation of the diluted EPS consist of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Options to purchase common stock		480		75		480		75
Warrants to purchase common stock		--		500		--		500
Restricted stock grants		58		131		58		131
Total potential common shares		538		706		538		706