This excerpt taken from the XIDE 10-K filed Jun 9, 2008.
Net Earnings (Loss) Per Share
The Company computes basic earnings (loss) per share in accordance with SFAS 128, Earnings Per Share by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income by diluted weighted average shares outstanding. Potentially dilutive shares include the assumed exercise of stock options and the assumed vesting of restricted stock and stock unit awards (using the treasury stock method) as well as the assumed conversion of the Companys Floating Rate Convertible Senior Subordinated Notes, if dilutive. The potential dilutive effect of the assumed conversion of convertible debt is determined using the if-converted method, and considers both the impact of incremented common shares after an assumed conversion, and the related addition to net income of the after-tax interest recognized during the period on the convertible debt. Shares which are contingently issuable under the Companys plan of reorganization have been included as outstanding common shares for purposes of calculating basic earnings (loss) per share.