Note 12.       Earnings per Share



Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period.  Diluted EPS is computed by dividing net income by the weighted average number of common shares outstanding during the period after giving effect to all dilutive potential common shares that were outstanding during the period.  Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of stock options and unvested shares granted to employees and directors.







Options to purchase approximately 2.7 million shares of common stock at weighted average exercise prices of $1.30 that were both outstanding for the year ended September 30, 2017 were not included in the computation of diluted net income per share because their effect was anti-dilutive.  Options to purchase approximately 90,000 shares of common stock at an exercise price of $3.92 per share that were outstanding for the year ended September 30, 2015 were not included in the computation of diluted net income per share because their effect was anti-dilutive.  All other outstanding stock options were included in the computation of diluted net income per share for the years ended September 30, 2017, 2016, and 2015.