Stockholders' Deficit and Income (Loss) Per Share

9 Months Ended

Sep. 30, 2022

Stockholders' Deficit and Income (Loss) Per Share [Line Items]

Stockholders' Equity Note Disclosure [Text Block]

Note 10 – Stockholders’ Deficit and Income (Loss) Per Share

The following table presents the calculation of income (loss) per share for the three and nine months ended September 30, 2022 and 2021:

	Three months ended September 30				Nine months ended September 30
In thousands, except per share data	2022		2021		2022		2021
Numerator:
Net (loss) income, as reported	$	(466)	$	(999)	$	557	$	(2,795)
Denominator:
Weighted average shares outstanding – basic and diluted		13,446		13,446		13,446		13,595
(Loss) earnings per share – basic and diluted	$	(0.03)	$	(0.07)	$	0.04	$	(0.21)

Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to common shares by the weighted average number of common shares outstanding for the period.  Diluted earnings (loss) per common share is computed by dividing net income (loss) attributable to common shares, by the weighted average number of common shares outstanding, adjusted for shares that would be assumed outstanding after warrants and stock options vested under the treasury stock method.

As of September 30, 2022, the Company included the effects of the stock options to purchase 280,000 shares outstanding in the calculation of diluted earnings per share.  As of September 30, 2022 and 2021, the Company had other warrants to purchase 1.6 million shares of Common Stock outstanding, which were excluded from the calculation of diluted earnings (loss) per share because their exercise price was greater than the average stock price for the period and their inclusion would have been anti-dilutive.

On March 28, 2022, the Company granted stock options to purchase 280,000 shares to executives and employees at an exercise price of $0.40 per share, which become vested on March 28, 2023.  The options were valued at the grant date using the Black-Scholes model with the following inputs:  expiration date March 28, 2026; risk-free rate of return 2.55%; and volatility 108%.

A summary of the status of the Company’s stock options as of September 30, 2022 and the changes during the nine months then ended is presented below:

	Number of Options		Weighted Average Exercise Price		Weighted average remaining contractual life (in years)		Average intrinsic value
Outstanding at December 31, 2021		-		-		-		-
Granted		280,000	$	0.40
Expired		-		-
Outstanding at September 30, 2022		280,000	$	0.40		3.5	$	0.19
Exercisable at the end of the period		-		-		-		-

Equity based compensation was $76,000 and $0 for the nine months ended September 30, 2022 and 2021, respectively.  Equity based compensation was $38,000 and $0 for the three months ended September 30, 2022 and 2021, respectively.  The total unrecognized equity based compensation cost related to unvested stock options was approximately $76,000 as of September 30, 2022 and will be recognized over the remainder of the vesting period.