6. Earnings Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share is based on the weighted average number of common shares outstanding during the periods presented.  Diluted earnings per share is based on the weighted average number of common shares outstanding, as well as dilutive potential common shares which, in the Company’s case, comprise shares issuable under convertible notes payable and stock options.  The treasury stock method is used to calculate dilutive shares, which reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options and convertible notes assumed to be exercised.  In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.

The following table sets forth the computation of basic and diluted net (loss) income per share.

	Three months ended					Six months ended
	June 30, 2014			June 30, 2013		June 30, 2014			June 30, 2013
Numerator for basic net (loss) income per share:
Net (loss) income	$	(144,561	)	$	15,282	$	(303,836	)	$	36,046
Denominator for basic net (loss) income per share:
Weighted average common shares outstanding		25,961,883			25,961,883		25,961,883			25,961,883
Basic net (loss) income per share		(.01	)		.00		(.01	)		.00

Numerator for diluted net (loss) income per share:
Net (loss) income	$	(144,561	)	$	15,282	$	(303,836	)	$	36,046
Denominator for diluted net (loss) income per share:
Weighted average common shares outstanding		25,961,883			25,961,883		25,961,883			25,961,883
Effect of dilutive securities - common stock options		0			1,126,641		0			1,183,302
Shares used in computing diluted net (loss) income per share		25,961,883			27,088,524		25,961,883			27,145,185
Diluted net (loss) income per share	$	(.01	)	$	.00	$	(.01	)	$	.00

Anti-dilutive shares excluded from net (loss) income per share calculation 30,745,393 23,362,469 30,745,893 23,087,469

Certain common shares issuable under stock options and convertible notes payable have been omitted from the diluted net (loss) income per share calculation because their inclusion is considered anti-dilutive because the exercise prices were greater than the average market price of the common shares or their inclusion would have been anti-dilutive.