Quarterly report pursuant to Section 13 or 15(d)

Basic and Diluted Net Income (Loss) Per Common Share

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Basic and Diluted Net Income (Loss) Per Common Share
 3 Months Ended
Mar. 31, 2014
Basic and Diluted Net Income (Loss) Per Common Share [Abstract]  
Basic and Diluted Net Income (Loss) Per Common Share
(6)            Basic and Diluted Net Income (Loss) Per Common Share

Basic net income or loss per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income or loss per share is based upon the weighted average number of common shares outstanding during the period, plus the effect of additional weighted average common equivalent shares outstanding during the period when the effect of adding such shares is dilutive. Common equivalent shares result from the assumed exercise of outstanding stock options and warrants (the proceeds of which are then assumed to have been used to repurchase outstanding stock using the treasury stock method). In addition, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options that are in-the-money. This results in the "assumed" buyback of additional shares, thereby reducing the dilutive impact of stock options and warrants. Common equivalent shares have not been included in the net loss per share calculations for the three months ended March 31, 2014, because the effect of including them would have been anti-dilutive.

Basic and diluted net income (loss) per share were determined as follows:

 
(in thousands, except share and per share amounts)
  
Three months ended
March 31,
  
 
  
2014
    
2013
  
 
  
   
 
Net income (loss)
  
$
(853
)
  
$
3,354
  
Weighted average shares outstanding
    
25,876,943
      
24,800,936
  
Basic net income (loss) per common share
  
$
(0.03
)
  
$
0.14
  
 
                
Net income (loss)
  
$
(853
)
  
$
3,354
  
Weighted average shares outstanding
    
25,876,943
      
24,800,936
  
Effect of dilutive options and warrants
    
-
      
355,265
  
Weighted average shares outstanding assuming dilution
    
25,876,943
      
22,156,201
  
Diluted net income (loss) per common share
  
$
(0.03
)
  
$
0.13
  
 
                
We did not include the following securities in the table below in the computation of diluted net income (loss) per common share because the securities were anti-dilutive during the periods presented:
 
  
   
 
 
  
   
 
 
  
March 31, 2014
    
March 31, 2013
  
Warrants
    
31,072,726
      
35,683,943
  
Stock options
    
11,944,200
      
863,904
  
Preferred stock Series A
    
58,067,234
      
58,267,234
  
Preferred stock Series B
    
20,000,000
      
20,000,000
  
Total
    
121,084,160
      
114,815,081