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Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2018

12. EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is similarly computed, except that the denominator includes the effect, using the treasury stock method, of stock options, convertible preferred stock and warrants, if including such potential shares of common stock is dilutive.

The following table presents a reconciliation of the weighted-average diluted shares outstanding:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017

Weighted average common shares outstanding-basic		13,234,709		5,834,568		12,697,206		5,834,568
Dilutive effect of:
Stock options		20,400		-		-		-
Weighted average common shares outstanding-diluted		13,255,109		5,834,568		12,967,206		5,834,568

We reported net losses for the three months ended September 30, 2017 and for the nine-month periods ended September 30, 2018 and 2017. As a result, our basic and diluted weighted average shares outstanding were the same for those periods because the effect of the common share equivalents was anti-dilutive.

The following table presents the weighted-average common share equivalents excluded from the calculation of diluted earnings per share due to their anti-dilutive effect:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017

Weighted average common shares equivalents excluded from diluted earnings per share due to their anti-dilutive effect:
Stock options		300,062		390,525		320,462		390,525
Unvested shares of common stock		-		100,000		-		100,000
Outstanding warrants		1,000,000		1,000,000		1,000,000		1,000,000
Series A convertible preferred stock		793,349		792,037		793,349		767,823
Total		2,093,411		2,282,562		2,113,811		2,258,348