Net (Loss) Per Common Share

9 Months Ended

Oct. 31, 2011

Net (Loss) Per Common Share [Abstract]

2. Net (Loss) Per Common Share

Basic net income (loss) per common share is calculated based on the weighted-average number of shares of common stock outstanding during the reporting period. Diluted net income per common share is ordinarily calculated giving effect to all potentially dilutive common shares, assuming such shares were outstanding during the reporting period. For loss periods, such potentially dilutive common shares are excluded from the calculation to avoid an anti-dilutive effect.

Following is a reconciliation of the numerators and denominators of the net income (loss) per common share computations for the three and nine months ended October 31 (unaudited):

	Numerator
Three Months Ended October 31,	2011			2010

Net loss	$	(1,294,099	)	$	(226,316	)
Less preferred stock dividends		(35,696	)		(35,696	)
Net loss applicable to common shares, basic and diluted	$	(1,329,795	)	$	(262,012	)

	Denominator
		2011			2010
Weighted-average common shares outstanding, basic		8,343,779			8,343,779
Effect of dilutive stock options		1,729,248			200,691
Weighted-average common shares outstanding, diluted		10,073,027			8,544,470

	Numerator
Nine Months Ended October 31,		2011			2010

Net loss	$	(4,344,700	)	$	(1,810,574	)
Less preferred stock dividends		(105,924	)		(105,924	)
Net loss applicable to common shares, basic and diluted	$	(4,450,624	)	$	(1,916,498	)

	Denominator
		2011			2010
Weighted-average common shares outstanding, basic		8,343,779			8,295,153
Effect of dilutive stock options		1,570,965			48,905
Weighted-average common shares outstanding, diluted		9,914,744			8,344,058

- Definition

The entire disclosure for earnings per share.

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AMERICAN WAGERING INC 10-Q