EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2012

Earnings per common share

EARNINGS (LOSS) PER SHARE

NOTE 6. EARNINGS (LOSS) PER SHARE

Basic earnings per share includes no dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the periods presented. The calculation of basic earnings per share for the nine months ended September 30, 2012 includes the weighted average of common shares outstanding.  Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity, such as convertible preferred stock, stock options, warrants or convertible securities.  The calculation of diluted earnings per share for the nine months ended September 30, 2012 does not include options to purchase 1,769,869 shares and warrants to purchase 1,065,203 shares due to their anti-dilutive effect.

The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share for the nine months ended September 30, 2012 and 2011:

	2012		2011
Basic Earnings per Share
Numerator:
Income  available to common shareholders	$	3,520,916	$	3,635,061
Denominator:
Weighted-average shares outstanding		10,085,206		8,722,642
Basic earnings per share	$	0.35	$	0.42
Diluted Earnings per Share
Numerator:
Income	$	3,520,916	$	3,635,061
Denominator:
Weighted-average shares outstanding		10,085,206		8,722,642
Effect of dilutive securities
Stock options and warrants		1,140,337		1,329,073
Preferred stock		3,133,147		4,452,167
Diluted weighted-average shares outstanding		14,358,691		14,503,882
Diluted earnings per share	$	0.25	$	0.25