NOTE 6. INCOME (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 common shareholders by the weighted average number of common shares outstanding during the period increased by the number of additional common 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 EPS computations.

	Three Months Ended March 31
	2018			2017
NUMERATOR (in thousands):
Basic and diluted - loss from continuing operations	$	(1,913	)	$	(2,413	)
Dividend on preferred stock--beneficial conversion feature		-			(778	)
Basic and diluted - adjusted loss from continuing operations	$	(1,913	)	$	(3,191	)

DENOMINATOR (in thousands):
Basic EPS - weighted average number of common shares outstanding		17,083,442			9,657,543
Effect of dilutive securities outstanding		-			-
Diluted EPS - weighted average number of shares outstanding		17,083,442			9,657,543

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		846,558			195,273
Warrants		21,959,539			17,635,102
Convertible preferred stock		597,865			3,054,435
Restricted stock units		650,167			-

Weighted average number of nonvested share of common stock not included in diluted EPS because effect would be antidilutive		1,275,452			1,196,057

The impacts of potentially dilutive securities outstanding at March 31, 2018 and 2017, were not included in the calculation of diluted EPS for the three months ended March 31, 2018 and 2017 because to do so would be anti-dilutive. Those securities listed in the table above which were anti-dilutive for March 31, 2018 and 2017, which remain outstanding, could potentially dilute EPS in the future.