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F-24
11. Other income, net:
In 2002, various patents which were acquired by us in the merger with Infonautics in 2001 were assigned to an
unrelated third party. In connection with the assignment of these patents, we retained the right to a share of any cash
flow received by the unrelated third party relating to the commercialization of these patents. As a result of this
assignment, during the year ended December 31, 2011 we received an amount of $0.4 million. No amount was received
during the years ended December 31, 2012 and 2010.
In March 2012, we received an amount of $0.5 million on the sale of certain intangible assets with no book
value.
12. Earnings per common share:
The following table reconciles the numerators and denominators of the basic and diluted earnings per common
share computation:
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010
N
umerator for basic and diluted earnings per common share:
Net income for the year $ 4,424,142 $ 6,170,231 $2,116,948
Denominator for basic and diluted earnings per common share:
Basic weighted average number of common shares
outstanding 45,832,862 53,454,675 57,982,248
Effect of stock options 3,302,082 2,294,758 1,973,540
Diluted weighted average number of shares outstanding 49,134,944 55,749,433 59,955,788
Basic earnings per common share $ 0.10 $ 0.12 $0.04
Diluted earnings per common share $ 0.09 $ 0.11 $0.04
Options to purchase 755,187 common shares were outstanding during 2012 (2011: 3,148,750; 2010: 2,937,000)
but were not included in the computation of diluted income per common share because the options’ exercise price was
greater than the average market price of the common shares. The options which expire in years 2013 to 2018 were still
outstanding at the end of 2012.
13. Commitments and contingencies:
(a) The Company has several non-cancelable lease and purchase obligations primarily for general office
facilities and equipment that expire over the next ten years. Future minimum payments under these agreements are as
follows:
2013 $ 2,017,000
2014 1,543,000
2015 1,481,000
2016 995,000
2017 953,000
Thereafter 1,584,000
Rental expense under operating lease agreements was $0.9 million, $0.9 million and $0.6 million for the years
ended December 31, 2012, 2011 and 2010, respectively.
(b) In the normal course of its operations, the Company becomes involved in various legal claims and
lawsuits. The Company intends to vigorously defend these claims. While the final outcome with respect to any actions
outstanding or pending as of December 31, 2012 cannot be predicted with certainty, it is the opinion of management that
their resolution will not have a material adverse effect on the Company’s financial position.