Earnings Per Share

6 Months Ended

Jun. 30, 2018

15.	Earnings Per Share

Basic net income per share is calculated using the weighted average number of shares of the Company’s common stock issued and outstanding during a certain period, and is calculated by dividing net income by the weighted average number of shares of the Company’s common stock issued and outstanding during such period. Diluted net income per share is calculated using the weighted average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period, using the as-if converted method for secured convertible notes, preferred stock, and the treasury stock method for options and common stock warrants.

Pursuant to the Merger Agreement, ApolloMed held back 10% of the shares of its common stock that were issuable to NMM shareholders (“Holdback Shares”) to secure indemnification of ApolloMed and its affiliates under the Merger Agreement. The Holdback Shares will be held for a period of up to 24 months after the closing of the Merger (to be distributed on a pro-rata basis to former NMM shareholders), during which ApolloMed may seek indemnification for any breach of, or noncompliance with, any provision of the Merger Agreement, by NMM. The Holdback Shares are excluded from the computation of basic earnings per share, but included in diluted earnings per share. As of both June 30, 2018 and 2017, APC held 1,682,110 shares of ApolloMed’s and NMM’s common stock, which are treated as treasury shares for accounting purposes and not included in the number of shares of common stock outstanding used to calculate earnings per share (see Note 10).

Below is a summary of the earnings per share computations:

Three Months Ended June 30,	2018		2017

Earnings per share – basic	$	0.08	$	0.08
Earnings per share – diluted	$	0.07	$	0.07
Weighted average shares of common stock outstanding – basic		32,674,459		25,067,954
Weighted average shares of common stock outstanding – diluted		37,850,679		28,417,877

Six Months Ended June 30,	2018		2017

Earnings per share – basic	$	0.15	$	0.25
Earnings per share – diluted	$	0.13	$	0.22
Weighted average shares of common stock outstanding – basic		32,548,662		25,067,954
Weighted average shares of common stock outstanding – diluted		37,935,773		28,417,877

Below is a summary of the shares included in the diluted earnings per share computations:

Three Months Ended June 30,	2018		2017

Weighted average shares of common stock outstanding – basic		32,674,459		25,067,954
10% shares held back pursuant to indemnification clause		3,039,609		2,785,328
Stock options		692,506		564,595
Warrants		1,444,105		-
Weighted average shares of common stock outstanding – diluted		37,850,679		28,417,877

Six Months Ended June 30,	2018		2017

Weighted average shares of common stock outstanding – basic		32,548,662		25,067,954
10% shares held back pursuant to indemnification clause		3,039,609		2,785,328
Stock options		720,103		564,595
Warrants		1,627,399		-
Weighted average shares of common stock outstanding – diluted		37,935,773		28,417,877