NOTE

BASIC AND DILUTED NET INCOME PER SHARE

Basic net income per share is based upon the weighted average number of common shares outstanding. Diluted net income per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Diluted net income per share reflects the effects of shares potentially issuable upon conversion of convertible preferred stock.

The components of basic and diluted earnings per share were as follows:

	Three Months Ended September 30, 2018
	Net Income		Shares		Per Share
Basic income per share:
Net income	$	285,954		29,559,139	$	0.01
Effect of dilutive securities
Preferred stock Series B		-		8,739,020		-
Diluted income per share	$	285,954		38,298,159	$	0.01

	Three Months Ended September 30, 20 17
	Net Income		Shares		Per Share
Basic income per share: 1
Net income	$	871,704		29,559,139	$	0.03
Effect of dilutive securities
Preferred stock Series B		-		8,739,020		-
Diluted income per share	$	871,704		38,298,159	$	0.02

Share amounts adjusted for

1:30

reverse stock split

December 15, 2017 (

Note

)