Quarterly report pursuant to Section 13 or 15(d)

Earnings per Share

v2.4.0.8
Earnings per Share
6 Months Ended
Jun. 30, 2013
Earnings per Share  
Earnings per Share

6.                                      Earnings per Share

 

Basic earnings per share is calculated using the Company’s weighted-average outstanding common shares. Diluted earnings per share is calculated using: the weighted-average outstanding common shares;  the dilutive effect of applying the “if converted method” to convertible notes and investor warrants with cashless exercise provision; and the dilutive effect of applying the treasury stock method to stock options and the 2013 warrants.  In applying the if-converted method to convertible notes and investor warrants with cashless exercise provisions, the Company has adjusted net income (loss) to exclude the impact of fair value changes and interest expense associated with these instruments for the purposes of calculating diluted earnings per share. The following table reconciles net income (loss) and weighted average shares outstanding used in computing basic and diluted earnings per share;

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net income (loss)

 

$

7,946

 

$

(1,444

)

$

137

 

$

(8,222

)

Change in fair value of warrants

 

(3,097

)

 

 

 

Change in fair value of convertible notes

 

(3,177

)

 

 

 

Interest expense on convertible notes

 

62

 

 

 

 

Net income (loss) available to common stockholders, plus assumed conversions

 

$

1,734

 

$

(1,444

)

$

137

 

$

(8,222

)

 

 

 

 

 

 

 

 

 

 

Basic weighted-average shares outstanding

 

63,922

 

30,983

 

52,858

 

30,668

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

Convertible notes

 

49,500

 

 

 

 

Right to shares

 

7,000

 

 

7,000

 

 

Warrants

 

17,304

 

 

 

 

Stock Options

 

38

 

 

102

 

 

Weighted-average shares-diluted

 

137,764

 

 

59,960

 

 

Net income per share-basic

 

$

0.12

 

$

(0.05

)

$

0.00

 

$

(0.27

)

Net income per share-diluted

 

$

0.01

 

 

$

0.00

 

 

 

For the three and six months ended June 30, 2012, 45,689,000 and 45,602,000, respectively, shares attributable to outstanding convertible notes, options and warrants were excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive.   For the three and six months ended June 30, 2013, outstanding convertible notes, options and warrants to purchase 47,777,683 and 96,337,383 shares of common stock, respectively, were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive.

 

During the three and six months ended June 30, 2013, options and warrants to purchase 47,777,683 and 64,141,716 shares of common stock, respectively, were excluded from the calculations of diluted earnings per share as their effect would have been anti-dilutive.  In addition, when applying the “if converted” method to the convertible debt, the net impact of adding back the interest expense and eliminating the fair value changes of the convertible debt would result in a reduction in net income of $1,753,000 for the six months ended June 30, 2013.  Accordingly the impact of the issuance of 49,500,000 shares of common stock upon conversion of convertible debt was excluded from the calculations of diluted earnings per share for the six months ended June 30, 2013 as their effect would have been anti-dilutive.