EARNINGS PER SHARE

9 Months Ended

Sep. 30, 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 and nine months ended September 30, 2017 and September 30, 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 and nine months ended September 30, 2017 and September 30, 2016 excludes: 1) options to purchase 3,030,249 and 2,777,552 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 3,376,938 and 4,895,244 shares, respectively, of common stock, 4) Series B1 Preferred Stock which is convertible into 12,862,572 and 12,501,558 shares, respectively, of common stock, 5) Series A Preferred Stock which is convertible into 456,608 and 492,716 shares, respectively, of common stock, and 6) 31,568 and 44,000 shares, respectively, of Series C Preferred Stock, which is convertible into 3,156,800 and 4,400,000 shares of common stock, respectively.

The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Basic Earnings per Share
Numerator:
Net (loss) income available to common shareholders	$	(3,829,125	)	$	(1,047,564	)	$	(10,572,545	)	$	(9,543,203	)
Denominator:
Weighted-average shares outstanding	32,655,135			30,576,485			32,651,961			29,884,836
Basic earnings per share	$	(0.12	)	$	(0.03	)	$	(0.32	)	$	(0.32	)

Diluted Earnings per Share
Numerator:
Net (loss) income available to common shareholders	$	(3,829,125	)	$	(1,047,564	)	$	(10,572,545	)	$	(9,543,203	)
Denominator:
Weighted-average shares outstanding	32,655,135			30,576,485			32,651,961			29,884,836
Effect of dilutive securities
Stock options and warrants	—			—			—			—
Preferred Stock	—			—			—			—
Diluted weighted-average shares outstanding	32,655,135			30,576,485			32,651,961			29,884,836
Diluted earnings per share	$	(0.12	)	$	(0.03	)	$	(0.32	)	$	(0.32	)