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EARNINGS (LOSS) PER SHARE
 6 Months Ended
Jun. 30, 2022
Earnings Per Share [Abstract]  
EARNINGS (LOSS) PER SHARE

NOTE 7. EARNINGS (LOSS) PER SHARE

 

Basic earnings per common share (“EPS”) applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding.

 

If there is a loss from operations, diluted EPS is computed in the same manner as basic EPS is computed. Similarly, if the Company has net income but its preferred dividend adjustment made in computing income available to common stockholders results in a net loss available to common stockholders, diluted EPS would be computed in the same manner as basic EPS. Accordingly, for the three and six months ended June 30, 2021, due to a net loss, the outstanding Series A Convertible Preferred Stock is considered anti-dilutive in which 9,076 and 1,167 were issued and outstanding at June 30, 2022 and 2021, respectively. Series A Convertible Preferred Stock is convertible into common stock on a 10 for 1 basis. The outstanding stock options are considered anti-dilutive in which 163,925 and 163,913 were issued and outstanding at June 30, 2022 and 2021.

 

The following represents the impact of options, stock awards, preferred stock and warrants on basic and diluted EPS for the three and six months ended June 30, 2022:

 

  ● Outstanding stock options are considered anti-dilutive, due to the exercise price being greater than the average market price, in which 163,925, were issued and outstanding at June 30, 2022.
  ● Vested Stock awards in the amount of 200,820 have been included in the basic and diluted EPS calculation for the three and six months ended June 30, 2022, and nonvested stock awards in the amount of 31,916 and 46,084 have been included in the diluted EPS calculation for the three and six months ended June 30, 2022, respectively.
  ● Outstanding Series A warrants are considered anti-dilutive, due to the exercise price being greater than the average market price, in which 1,695,000, were issued and outstanding at June 30, 2022.
  ● Series B Convertible Preferred stock are considered dilutive and included in the calculation of diluted EPS.
  ● The 631,276 potential settlement shares of the warrant liability associated with Series B Warrants are considered dilutive and included in the calculation of diluted EPS for the six months ended June 30, 2022. The effects of the warrants that have been recorded in net income on the condensed consolidated statement of operations have been eliminated in the calculation of diluted EPS for the three and six months ended June 30, 2022.

 

 

  ● The potential settlement shares of the warrant liability associated with the Placement Agent Warrants are considered dilutive and anti-dilutive for the three and six months ended June 30, 2022, respectively, and is included in Diluted EPS calculation for the three months ended June 30, 2022.
  ● The 3,276,929 Series C prepaid warrants have been exercised in 2022. 1,676,737 and 2,743,896 weighted shares were included as outstanding shares in the calculation of basic and diluted EPS for the period prior to exercise for the three and six months ended June 30, 2022, respectively, because they represent shares issuable for only nominal consideration.
  ● The 1,222,497 Series D prepaid warrants have been included as outstanding shares in the calculation of basic and diluted EPS, as they represent shares issuable for only nominal consideration. The Company reduced income available to common stockholders by $0 and $6,930,335 for the associated Series D deemed dividend in the calculation of basic and diluted EPS for the three and six months ended June 30, 2022, respectively.

 

The calculations of basic and diluted EPS, are as follows:

 

   Three Months   Three Months 
   ended   ended 
   June 30, 2022   June 30, 2021 
Net income (loss)  $10,495,691   $(1,276,886)
Deemed dividend   -    - 
Net income (loss), numerator, basic computation   10,495,691    (1,276,886)
Recognition and change in fair value of warrant liability   (12,633,251)   - 
Net income (loss), numerator, diluted computation  $(2,137,560)  $(1,276,886)
           
Weighted average shares - denominator basic computation   18,738,290    10,934,489 
Effect of stock awards   31,916    - 
Effect of preferred stock   2,219,084    - 
Weighted average shares, as adjusted - denominator diluted computation   20,989,290    10,934,489 
Earnings (loss) per common share – basic  $0.56   $(0.12)
Earnings (loss) per common share – diluted   (0.10)   (0.12)

 

   Six Months   Six Months 
   ended   ended 
   June 30, 2022   June 30, 2021 
Net income (loss)  $19,835,692   $(1,890,812)
Deemed dividend   (6,930,335)   - 
Net income (loss), numerator, basic computation   12,905,357    (1,890,812)
Recognition and change in fair value of warrant liability   (24,748,163)   - 
Net income (loss), numerator, diluted computation  $(11,842,806)  $(1,890,812)
           
Weighted average shares - denominator basic computation   17,238,285    9,259,738 
Effect of stock awards   46,084    - 
Effect of Series B warrant liability   2,219,084    - 
Effect of preferred stock   631,276    - 
Weighted average shares, as adjusted - denominator diluted computation   20,134,729    9,259,738 
Earnings (loss) per common share - basic  $0.75   $(0.20)
Earnings (loss) per common share - diluted  $(0.59)  $(0.20)