Note 3. Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average shares of common stock outstanding for the period. Diluted net income (loss) per share is calculated by dividing net income (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. The Company calculates diluted earnings 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 (loss) per share:

	Three Months Ended March 31,
	2018			2017
Numerator:
Net income (loss)	$	(1,105,791	)	$	385,090
Denominator:
Weighted average common shares outstanding - basic		9,479,742			9,359,562
Plus dilutive effect of potential common shares		—			842,044
Weighted average common shares outstanding - diluted		9,479,742			10,201,606
Net income (loss) per share:
Basic	$	(0.12	)	$	0.04
Diluted	$	(0.12	)	$	0.04

Diluted weighted average common shares outstanding for the three months ended 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:

	Three Months Ended March 31,
	2018		2017
Employee stock options		1,159,062		6,581
Warrants outstanding		51,003		—
Total		1,210,065		6,581