EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2017

Basic earnings per share includes no dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the periods presented. The calculation of basic earnings per share for the three months ended March 31, 2017 and March 31, 2016, respectively, includes the weighted average of common shares outstanding. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity, such as convertible preferred stock, stock options, warrants or convertible securities. Due to their anti-dilutive effect, the calculation of diluted earnings per share for the three months ended March 31, 2017 and March 31, 2016 excludes: 1) options to purchase 3,032,345 and 2,607,552 shares, respectively, of common stock, 2) warrants to purchase 7,353,061 and 4,252,135 shares, respectively, of common stock, 3) Series B Preferred Stock which is convertible into 3,327,028 and 8,283,234 shares, respectively, of common stock, 4) Series B1 Preferred Stock which is convertible into 12,579,522 and zero shares, respectively, of common stock, and 5) Series A Preferred and Series C Preferred Stock, convertible into common stock on a 1-for-one basis.

The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share for the three months ended March 31, 2017 and 2016:



	Three Months Ended March 31,
	2017			2016
Basic Earnings per Share
Numerator:
Net (loss) income available to common shareholders	$	(4,047,244	)	$	(2,163,774	)
Denominator:
Weighted-average shares outstanding	32,953,812			29,304,722
Basic earnings per share	$	(0.12	)	$	(0.07	)

Diluted Earnings per Share
Numerator:
Net (loss) income available to common shareholders	$	(4,047,244	)	$	(2,163,774	)
Denominator:
Weighted-average shares outstanding	32,953,812			29,304,722
Effect of dilutive securities
Stock options and warrants	—			—
Preferred Stock	—			—
Diluted weighted-average shares outstanding	32,953,812			29,304,722
Diluted earnings per share	$	(0.12	)	$	(0.07	)