Shareholders' Equity

9 Months Ended

Sep. 30, 2011

Shareholders' Equity [Abstract]

Shareholders' Equity

5. Shareholders' Equity

Common Stock and Option Issuance

For the nine months ended September 30, 2011 111,000 shares of restricted stock were granted to directors of the Company at a fair value of $86,000, as set forth in Note 3.  The Company also issued 350,000 shares on the exercise of 350,000 options for $217,000 to the former CEO.

During the nine months ended September 30, 2010 the Company issued 202,500 restricted common shares with a fair value of $426,000 based on the closing share price on the date of the grant to certain officers under employment agreements.  The Company also issued 151,283 shares on exercise of 345,000 options on a cashless basis.  In addition, the Company considers outstanding 75,192 common shares held in deferred compensation accounts for directors.

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 nine months ended September 30, 2011 and 2010 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Weighted Average Common shares outstanding		11,914		11,563		11,776		11,426
Options to purchase common stock		71		131		--		198
Restricted stock grants		8		1		--		4
Total diluted shares		11,993		11,695		11,776		11,628

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 September 30,				Nine Months Ended  September 30,
	2011		2010		2011		2010
Options to purchase common stock		153		75		153		75
Restricted stock grants		24		99		47		99
Total potential common shares		177		174		200		174

See notes to condensed consolidated financial statements.