Net Income (Loss) Per Share

3 Months Ended

Mar. 31, 2017

Note 3. Net Income (Loss) Per Share

Basic net income or loss per share is calculated by dividing net income or loss available to common stockholders by the weighted average shares of common stock outstanding for the period. The per share computations reflect the one-for-ten reverse stock split that was effected in July 2016. Diluted net income or loss per share is calculated by dividing net income or loss by the weighted average shares of common stock outstanding for the period plus amounts representing the dilutive effect of securities that are convertible into common stock. Preferred dividends are deducted from net income or loss in arriving at net income or loss attributable to common stockholders. The Company calculates diluted earnings or loss per common share using the treasury stock method and the as-if-converted method, as applicable.

The following table presents the computation of net income or loss per share:

	Three Months Ended March 31,
	2017		2016
Numerator:
Net income	$	385,090	$	139,153
Accretion of dividends on preferred stock		—		(604,069	)
Net income (loss) attributable to common stockholders - basic	$	385,090	$	(464,916	)
Adjustment for change in fair value of warrant liability		—		(78,834	)
Net income (loss) attributable to common stockholders - diluted	$	385,090	$	(543,750	)
Denominator:
Weighted average common shares outstanding
Basic		9,359,562		665,842
Diluted		10,201,606		665,842
Net income (loss) per share:
Basic	$	0.04	$	(0.70	)
Diluted	$	0.04	$	(0.82	)

Diluted weighted average common shares outstanding as of March 31, 2017 includes 10,532 warrants and 831,512 options outstanding.

Potentially dilutive securities not included in the calculation of diluted net income (loss) per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares):

	Three Months Ended March 31,
	2017		2016
Preferred redeemable convertible stock, including accumulated dividends		—		4,944,630
Employee stock options		6,581		754,192
Series G preferred stock warrants outstanding		—		788,338
Total		6,581		6,487,160