Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share

Earnings Per Share

7. Earnings Per Share

Basic earnings per common share are computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options, unvested restricted stock, common stock warrants, and preferred stock) were exercised or converted into common stock or resulted in the issuance of common stock (net of any assumed repurchases) that then shared in the earnings of the Company, if any. This is computed by dividing net earnings by the combination of dilutive common share equivalents, which is comprised of shares issuable under outstanding warrants, the conversion of preferred stock, and the Company’s share-based compensation plans, and the weighted average number of common shares outstanding during the reporting period. Since the Company is in a net loss position, all common stock equivalents would be considered to be anti-dilutive and are, therefore, not included in the determination of diluted earnings per share. Accordingly, basic and diluted loss per share are the same.

The following table provides the components of the calculations of basic and diluted earnings per share:

	Three Months Ended						Nine Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Numerator:
Net loss attributable to common shareholders	$	(9,377,064	)	$	(15,947,280	)	$	(81,461,024	)	$	(33,861,726	)
Denominator:
Weighted average number of common shares outstanding	169,557,223			84,150,851			154,539,225			67,194,806

The potential dilutive common shares are summarized as follows:

	At September 30,
	2014	2013
Stock options outstanding	7,267,404	4,145,689
Restricted stock outstanding	433,336	—
Common stock warrants (1)	4,219,442	27,636,465
Preferred stock (2)	5,554,594	10,972,859
Number of dilutive potential common shares	17,474,776	42,755,013

(1) In May 2011, the Company issued 7,128,563 warrants as part of an underwritten public offering. As a result of additional public offerings, and pursuant to the effect of the anti-dilution provisions of these warrants, the number of warrants increased to 22,995,365. Of the warrants issued in May 2011, 22,776,023 have been exercised as of September 30, 2014. In February 2013, the Company issued 23,637,500 warrants as part of an underwritten public offering. Of the warrants issued in February 2013, 23,637,400 were exercised as of September 30, 2014. In January 2014, the Company issued 4,000,000 warrants as part of an underwritten public offering. Of the warrants issued in January 2014, none of have been exercised as of September 30, 2014.

(2) The preferred stock amount represents the dilutive potential common shares of the Series C redeemable convertible preferred stock issued on May 16, 2013 based on the conversion price of the preferred stock as of September 30, 2014.  Of the 10,431 preferred shares issued in May 2013, 5,200 had been converted to common stock as of September 30, 2014.