Note 3 - Basic and Diluted Net Income Per Share

3 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 3. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Basic net income per share is based upon the weighted average number of common shares outstanding. This calculation includes the weighted average number of Series B Convertible Preferred shares outstanding also, as they are deemed to be substantially similar to the common shares and shareholders are entitled to the same liquidation and dividend rights. Potentially dilutive securities include the Series B Convertible Preferred Shares, outstanding unvested restricted stock awards, and outstanding warrants to purchase common stock. The treasury stock method is used to compute the potentially dilutive effect of outstanding warrants, stock options, and unvested restricted stock. Under this method, options, warrants, and unvested restricted stock 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. 

On August 25, 2021 the Company adopted the 2021 Omnibus Equity Incentive Plan (the "Plan") and had not issued any awards under the Plan as of June 30, 2022. During the quarter ending September 30, 2022 the Company issued 277,037 restricted stock awards to employees. The Company has also authorized a reverse stock split of its Common Stock by a ratio of not less than 1-for-1.5 and not more than 1-for-2.75 (the “Reverse Stock Split”) at any time prior to the one year anniversary of filing of a definitive Information Statement on Schedule 14C with the Board of Directors (the "Board") having the discretion as to whether or not the Reverse Stock Split is to be effected, and with the exact ratio of any Reverse Stock Split to be set within the above range as determined by the Board in its discretion.

Basic and diluted net income per share reflects the effects of shares potentially issuable upon conversion of convertible preferred stock. The dilutive effect of nonvested restricted stock awards results in approximately 29,200 incremental shares to be included in the diluted shares used in the calculation of diluted earnings per share for the three months ended September 30, 2022. The incremental diluted shares have no impact on earnings per share and have been omitted from the table presented below. All other potentially dilutive securities have been excluded from the calculation of diluted earnings per share because their inclusion would be antidilutive.

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

	For the Three Months Ended September 30, 2022
	Net Income		Shares		Per Share
Basic net income per share:
Net income available to common shareholders	$	485,011		39,383,459	$	0.01
Net income available to preferred shareholders		12,157		987,200	$	0.01
Basic net income per share	$	497,168		40,370,659	$	0.01

	For the Three Months Ended September 30, 2021
	Net Loss)			Shares		Per Share
Basic net loss per share:
Net loss available to common shareholders	$	(1,830,770	)		37,445,919	$	(0.05	)
Net loss available to preferred shareholders		(50,223	)		1,027,240	$	(0.05	)
Basic and diluted net loss per share	$	(1,880,993	)		38,473,159	$	(0.05	)