Earnings Per Share

9 Months Ended

Sep. 30, 2016

4. Earnings Per Share

For purposes of determining diluted earnings per share, when the Company is in a net loss position, all common stock equivalents would be considered to be anti-dilutive.

The potential dilutive common shares are summarized as follows:


	At September 30,
	2016	2015
Stock options outstanding (1)	14,982,570	11,789,611
Restricted stock outstanding	26,667	395,558
Common stock warrants (2)	4,000,100	4,192,567
Preferred stock (3)	5,554,594	5,554,594
Number of dilutive potential common shares	24,563,931	21,932,330

(1)

During the three months ended September 30, 2016 and 2015, the Company granted 3,312,500 and 3,270,000 stock options, respectively. During the nine months ended September 30, 2016 and 2015, the Company granted 3,592,500 and 3,920,000 stock options, respectively.

(2)

In May 2011, the Company issued 7,128,563 warrants as part of an underwritten public offering with an exercise price of $0.93 per warrant. 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 these warrants issued in May 2011, zero and 192,467 were unexercised as of September 30, 2016 and 2015, respectively. In February 2013, the Company issued 23,637,500 warrants as part of an underwritten public offering with an exercise price of $0.15 per warrant. Of these warrants issued in February 2013, 100 were unexercised as of September 30, 2016 and 2015. In January 2014, the Company issued 4,000,000 warrants as part of an underwritten public offering with an exercise price of $4.00 per warrant. Of these warrants issued in January 2014, none have been exercised as of September 30, 2016 and 2015. All warrants have anti-dilution provisions.

(3)

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, 2016. Of the 10,431 preferred shares issued in May 2013, 5,200 had been converted to common stock as of September 30, 2016.