Net Income (Loss) per share

12 Months Ended

Dec. 31, 2011

Net Income (Loss) per share [Abstract]

Net Income (Loss) per share

4. Net Income (Loss) per share

The Company reports earnings per share in accordance with Accounting Standards Codification 260, Earnings Per Share (ASC 260), which establishes standards for computing and presenting earnings per share. Basic and diluted net income (loss) per share is presented in conformity with the two-class method required for participating securities. Under the two-class method, basic net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Net income (loss) attributable to common stockholders is determined by allocating undistributed earnings between holders of common and convertible preferred stock, based on the contractual dividend rights contained in our preferred stock agreement. No preferred dividends have been declared and, as such, preferred dividends have not affected our computation of net income available to common stockholders. Diluted net income (loss) per share is computed by dividing net income (loss) by the sum of the weighted average number of common shares and the number of dilutive potential common share equivalents outstanding during the period. Dilutive common share equivalents consist of the incremental common shares issuable upon the conversion of the Series F convertible preferred stock to common shares.

In computing diluted earnings per share, common stock equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common stock equivalents would be anti-dilutive. As a result, there is no difference between the Company’s basic and diluted loss per share for the year ended December 31, 2011.

Basic and diluted net income (loss) per share	December 31,
	2011			2010
Net income (loss)	$	(2,882,214	)	$	512,419
Less: Accretion of Preferred stock		—			(343,000	)
Less: Income allocated to convertible preferred shares		—			(26,282	)
Income (loss) available to common stockholders for the purpose of calculating basic & diluted EPS		(2,882,214	)		143,137
Weighted average common shares, basic		29,626,072			26,686,933
Dilutive effect of Series F preferred share conversion		—			4,900,000
Weighted average common shares, diluted		29,626,072			31,586,933
Net income (loss) per share, basic	$	(0.10	)	$	0.01
Net income (loss) per share, diluted	$	(0.10	)	$	0.00

Stock options and warrants to purchase 3,652,443 shares of common stock were outstanding as of December 31, 2010, but were not included in the computation of diluted net loss per common share because the exercise prices were greater than the average market price for the period, making them anti-dilutive.

Shares of common stock reserved for issuance upon conversion of the 5% Convertible Promissory Notes were 8,731,035 and 13,485,889 as of December 31, 2011 and 2010, respectively, but were not included in the computation of diluted net income (loss) per share because they would have been anti-dilutive. The conversion of the 5% convertible promissory notes outstanding as of December 31, 2011 could potentially dilute earnings per share in the future.