1. Unaudited Interim Financial Statements

6 Months Ended

Jun. 30, 2017

Notes

1. Unaudited Interim Financial Statements

1. UNAUDITED INTERIM FINANCIAL STATEMENTS

The unaudited condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto for the year ended December 31, 2016.

The information furnished reflects, in the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of the interim periods presented. Operating results of the interim period are not necessarily indicative of the amounts that will be reported for the year ending December 31, 2017. 

Income (Loss) Per Share

Income (loss) per share – basic is calculated by dividing net income (loss) by the weighted average number of shares of stock outstanding during the year, including shares issuable without additional consideration. Income per share – assuming dilution is calculated by dividing net income by the weighted average number of shares outstanding during the year adjusted for the effect of dilutive potential shares calculated using the treasury stock method.

Schedule of Income (Loss) Per Share
	Three Months Ended		Six Months Ended
	June 30, 2017	June 30, 2016	June 30, 2017	June 30, 2016
Numerator:
Net loss available to common shareholders	$        (22,403)	$         (14,069)	$        (23,938)	$           (57,124)
Denominator:
Weighted average shares and share equivalents outstanding – basic	11,871,009	9,118,161	11,871,009	9,118,161
Effect of preferred stock	987,102	987,102	987,102	987,102
Effect of dilutive stock options	1,716,630	2,884,569	1,581,341	2,849,248
Effect of dilutive warrants	233,852	222,727	225,917	220,000
Weighted average shares and share equivalents outstanding – assuming dilution	14,808,593	13,212,560	14,665,369	13,174,511
Net loss per share — basic and diluted	$               (.00)	$                (.00)	$               (.00)	$                (.01)

 Basic and diluted loss per share were the same for the three and six months ended June 30, 2017 and 2016 because there was a net loss for the period.  

Schedule of Anti-dilutive Securities Excluded
	Three Months Ended		Six Months Ended
	June 30, 2017	June 30, 2016	June 30, 2017	June 30, 2016
Stock options	-	9,000	-	9,000
Convertible promissory notes	166,881	199,346	166,881	199,346
Total anti-dilutive securities excluded	166,881	208,346	166,881	208,346

Anti-dilutive securities consist of stock options and convertible promissory notes whose exercise price or conversion price, respectively, was greater than the average market price of the common stock.