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NOTE 9 — Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

NOTE 9 — Net Income (Loss) Per Share

NOTE 9 — Net Income (Loss) Per Share

The following table sets forth the reconciliation of basic shares to diluted shares and the computation of basic and diluted net income (loss) per share:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020
Numerator:
Net income (loss)		$	643,626			$	(4,002,786	)*		$	3,473,635			$	(4,861,136	)*
Net income (loss) allocated to restricted stock award			(55,001	)			264,275				(297,932	)			263,128
Adjusted net income (loss) for basic earnings per share		$	588,625			$	(3,738,511	)*		$	3,175,703			$	(4,598,008	)*
Convertible note interest			43,560				—				132,315				—
Adjusted net income (loss) before interest for diluted earnings per share		$	632,185			$	(3,738,511	)*		$	3,308,018			$	(4,598,008	)*
Denominator: Weighted average shares outstanding used in computing net income (loss) per share:
Basic			7,162,924				6,037,559				6,927,837				6,020,363
Effect of dilutive stock options			817,556				—				1,045,654				—
Effect of convertible note shares			958,904				—				958,904				—
Diluted			8,939,384				6,037,559				8,932,395				6,020,363
Net income (loss) per share applicable to common stockholders:
Basic		$	0.08			$	(0.62	)*		$	0.46			$	(0.76	)*
Diluted		$	0.07			$	(0.62	)*		$	0.37			$	(0.76	)*

*Amounts for 2020 include goodwill impairment charges of $4.43 million recorded as of September 30, 2020. Additional information regarding goodwill impairment is contained in “Note 2 - Summary of Significant Accounting Policies.”

SOCKET MOBILE, INC. 

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

September 30, 2021

In the three and nine months ended September 30, 2021, 45,000 stock options and 50,000 warrants were excluded in the calculation of diluted net income per share as their effect would have been anti-dilutive.

For the three and nine months ended September 30, 2020, the shares used in computing diluted net loss per share do not include 2,599,187 dilutive stock options and shares of restricted stock, nor do they include 1,047,945 dilutive conversion shares as the effect is anti-dilutive given the Company’s loss.

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- Definition

Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=124432515&loc=d3e3550-109257

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=124432515&loc=d3e3630-109257

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