EARNINGS PER SHARE

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. Diluted earnings per share reflects 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 September 30, 2019 and 2018 excludes: 1) options to purchase 4,218,250 and 3,438,837 shares, respectively, of common stock, 2) warrants to purchase 8,853,056 and 7,353,056 shares, respectively, of common stock, 3) Series B Preferred Stock which is convertible into 3,769,505 and 3,551,549 shares, respectively, of common stock, 4) Series B1 Preferred Stock which is convertible into 10,417,966 and 11,074,331 shares, respectively, of common stock, and 5) Series A Preferred Stock which is convertible into 419,859 of common stock as of September 30, 2019 and 2018. Due to their anti-dilutive effect, the calculation of diluted earnings per share for the nine months ended September 30, 2019 and 2018 excludes: 1) options to purchase 4,218,250 and 3,438,837 shares, respectively, of common stock, 2) warrants to purchase 8,853,056 and 7,353,056 shares, respectively, of common stock, 3) Series B Preferred Stock which is convertible into 3,769,505 and 3,499,059 shares, respectively, of common stock, 4) Series B1 Preferred Stock which is convertible into 10,417,966 and 13,105,989 shares, respectively, of common stock, and 5) Series A Preferred Stock which is convertible into 419,859 shares of common stock as of September 30, 2019 and 2018.

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, 2019 and 2018:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018

Basic Earnings per Share
Numerator:
Net loss available to common shareholders	$	(3,911,581	)	$	(4,635,372	)	$	(11,215,851	)	$	(6,652,027	)
Denominator:
Weighted-average shares outstanding	41,376,335			35,144,113			40,626,700			33,843,721
Basic loss per share	$	(0.09	)	$	(0.13	)	$	(0.28	)	$	(0.20	)

Diluted Earnings per Share
Numerator:
Net loss available to common shareholders	$	(3,911,581	)	$	(4,635,372	)	$	(11,215,851	)	$	(6,652,027	)
Denominator:
Weighted-average shares outstanding	41,376,335			35,144,113			40,626,700			33,843,721
Effect of dilutive securities
Stock options and warrants	—			—			—			—
Preferred stock	—			—			—			—
Diluted weighted-average shares outstanding	41,376,335			35,144,113			40,626,700			33,843,721
Diluted loss per share	$	(0.09	)	$	(0.13	)	$	(0.28	)	$	(0.20	)