• Filing Date: 2018-11-13
  • Form Type: 10-Q
  • Description: Quarterly report
v3.10.0.1
EARNINGS (LOSS) PER SHARE
9 Months Ended
Sep. 30, 2018
Earnings Loss Per Share  
EARNINGS (LOSS) PER SHARE

The following table provides information relating to the calculation of earnings (loss) per common share: 

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2018     2017     2018     2017  
Basic and diluted (loss) earnings per share                                  
    Net (loss) earnings from continuing operations   $ (503,834 )   $ (791,360 )   $ (3,618,967 )   $ (1,913,460 )
    Less: preferred stock accretion     (166,519 )     (144,916 )     (482,696 )     (400,616 )
    Less: preferred stock dividends     (114,908 )     (87,907 )     (344,724 )     (251,508 )
        Net income (loss) attributable to shareholders     (785,261 )     (1,024,183 )     (4,446,387 )     (2,565,584 )
    Weighted average common shares outstanding - basic     14,542,362       11,756,560       14,524,030       10,920,866  
        Basic (loss) earnings per share   $ (0.05 )   $ (0.09 )   $ (0.31 )   $ (0.23 )
    Weighted average common shares outstanding - diluted     14,542,362       11,756,560       14,524,030       10,920,866  
        Diluted (loss) earnings per share   $ (0.05 )   $ (0.09 )   $ (0.31 )   $ (0.23 )
            Common stock equivalents excluded due to anti-dilutive effect     2,675,906       2,016,838       2,690,768       2,048,739  

 

As the Company had a net loss for the three months ended September 30, 2018, the following 2,675,906 potentially dilutive securities were excluded from diluted loss per share: 917,950 for outstanding warrants, 974,487 related to the Series A Preferred Stock, 481,722 related to the Series B Preferred Stock and 301,747 related to outstanding options. In addition, 10,000 options were excluded from the diluted loss per share calculations as the exercise price of these shares exceeded the per share value of the common stock.

 

For the three months ended September 30, 2017, the following 2,016,838 potentially dilutive securities were excluded from diluted loss per share as the Company had a net loss: 967,845 for outstanding warrants and 974,487 related to the Series A Preferred Stock and 74,506 related to outstanding options. In addition, 15,707 options were excluded from the diluted loss per share calculations as the exercise price of these shares exceeded the per share value of the common stock.

 

For the nine months ended September 30, 2018, the following 2,690,768 potentially dilutive securities were excluded from diluted loss per share as the Company had a net loss: 917,950 for outstanding warrants, 974,487 related to the Series A Preferred Stock, 481,722 related to the Series B Preferred Stock and 316,609 related to outstanding options. In addition, 475,942 options were excluded from the diluted loss per share calculations as the exercise price of these shares exceeded the per share value of the common stock.

 

For the nine months ended September 30, 2017, the following 2,048,739 potentially dilutive securities were excluded from diluted loss per share as the Company had a net loss: 1,052,122 for outstanding warrants and 917,931 related to the Series A Preferred Stock and 78,686 related to options. In addition, 10,000 options were excluded from the diluted loss per share calculations as the exercise price of these shares exceeded the per share value of the common stock.

 

(Loss) Earnings Per Share under Two – Class Method

 

The Series A Preferred Stock and Series B Preferred Stock have the non-forfeitable right to participate on an as converted basis at the conversion rate then in effect in any common stock dividends declared and, as such, is considered a participating security. The Series A Preferred Stock and Series B Preferred Stock are included in the computation of basic and diluted loss per share pursuant to the two-class method. Holders of the Series A Preferred Stock and Series B Preferred Stock do not participate in undistributed net losses because they are not contractually obligated to do so.

 

The computation of diluted (loss) earnings per share attributable to common stockholders reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock that are dilutive were exercised or converted into shares of common stock (or resulted in the issuance of shares of common stock) and would then share in our earnings. During the periods in which we record a loss attributable to common stockholders, securities would not be dilutive to net loss per share and conversion into shares of common stock is assumed not to occur.

 

The following table provides a reconciliation of net (loss) to preferred shareholders and common stockholders for purposes of computing net (loss) per share for the three and nine months ended September 30, 2018 and 2017.

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2018     2017     2018     2017  
Numerator:                        
    Net (loss) earnings from continuing operations   $ (503,834 )   $ (791,360 )   $ (3,618,967 )   $ (1,913,460 )
    Less: preferred stock accretion     (166,519 )     (144,916 )     (482,696 )     (400,616 )
    Less: preferred stock dividends     (114,908 )     (87,907 )     (344,724 )     (251,508 )
        Net income (loss) attributable to shareholders   $ (785,261 )   $ (1,024,183 )   $ (4,446,387 )   $ (2,565,584 )
Denominator (basic):                                
   Weighted average common shares outstanding     14,542,362       11,756,560       14,524,030       10,920,866  
    Participating securities - Series A preferred stock     974,487       974,487       974,487       917,931  
    Participating securities - Series B preferred stock     481,722       -       481,722       -  
        Weighted average shares outstanding     15,998,571       12,731,047       15,980,239       11,838,797  
                                 
Loss per common share - basic under two-class method   $ (0.05 )   $ (0.08 )   $ (0.28 )   $ (0.22 )
                                 
Denominator (diluted):                                
    Weighted average common shares outstanding     14,542,362       11,756,560       14,524,030       10,920,866  
    Participating securities - Series A preferred stock     974,487       974,487       974,487       917,931  
    Participating securities - Series B preferred stock     481,722       -       481,722       -  
        Weighted average shares outstanding     15,998,571       12,731,047       15,980,239       11,838,797  
                                 
Loss per common share - basic under two-class method   $ (0.05 )   $ (0.08 )   $ (0.28 )   $ (0.22 )