NOTE 5. LOSS PER SHARE (EPS)

Basic EPS is calculated under the two-class method under which all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities based on their respective rights to receive dividends. Our outstanding convertible preferred stocks are considered participating securities as the holders may participate in undistributed earnings with holders of common shares and are not obligated to share in our net losses.

Diluted EPS is computed by dividing the net income attributable to RiceBran Technologies shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding if the impact of assumed exercises and conversions is dilutive. The dilutive effects of outstanding options, warrants, nonvested shares and restricted stock units that vest solely on the basis of a service condition are calculated using the treasury stock method. The dilutive effects of the outstanding preferred stock are calculated using the if-converted method.

Below are reconciliations of the numerators and denominators in the continuing operations EPS computations for the three and nine months ended September 30, 2017 and 2016.

	Three Months Ended						Nine Months Ended
	2017			2016			2017			2016
NUMERATOR (in thousands):
Basic and diluted - loss from continuing operations	$	(4,199	)	$	(942	)	$	(8,387	)	$	(4,975	)
Dividend on preferred stock--beneficial conversion feature		-			-			(778	)		(551	)
Basic and diluted - adjusted loss from continuing operations	$	(4,199	)	$	(942	)	$	(9,165	)	$	(5,526	)

DENOMINATOR:
Basic EPS - weighted average number of common shares outstanding		11,129,781			9,397,255			10,644,372			9,281,942
Effect of dilutive securities outstanding		-			-			-			-
Diluted EPS - weighted average number of shares outstanding		11,129,781			9,397,255			10,644,372			9,281,942

Number of shares of common stock which could be purchased with weighted average outstanding securities not included in diluted EPS because effect would be antidilutive:
Stock options		629,969			340,037			473,498			350,203
Warrants		22,824,888			10,842,006			21,306,727			10,132,045
Nonvested stock		1,301,725			1,114,747			1,236,241			1,038,019
Convertible preferred stock		2,128,180			2,000,000			3,020,739			1,611,722
Restricted stock unit awards		1,175,000			-			406,066			-

The impact of potentially dilutive securities outstanding at September 30, 2017 and 2016, was not included in the calculation of the continuing operations diluted EPS for the three and nine months ended September 30, 2017 and 2016 because to do so would be antidilutive. Those securities listed in the table above which were antidilutive for the periods presented, which remain outstanding, could potentially dilute EPS in the future.