EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2015

NOTE 10 - EARNINGS PER SHARE

As of September 30, 2015, Kingold had 294,000 warrants issued and outstanding in connection with the issuance of its common stock in public offerings. All of these warrants were issued in 2011, of which 150,000 have an exercise price of $3.25 and will expire on January 13, 2016, and 144,000 of which have an exercise price of $3.99, and will expire on January 13, 2016. As of September 30, 2015, these warrants were anti-dilutive because the exercise prices were higher than the average market price for the three and nine months ended September 30, 2015. Accordingly, such warrants are not included in weighted average shares calculation for 2015.

As of September 30, 2015, Kingold also had 3,220,000 options outstanding to purchase the same number of shares of the Company’s common stock. Of those options, 120,000 options were granted in 2011, with an exercise price of $2.27, and will expire on October 31, 2021; 1,500,000 options were granted in 2011, with an exercise price of $2.59, and will expire on October 31, 2021; 1,300,000 options were granted in 2012, with an exercise price of $1.22, and will expire on January 9, 2022; 120,000 options were granted in 2012, with an exercise price of $1.49, and will expire on April 1, 2022; 90,000 options were granted in 2013, with an exercise price of $1.18, and will expire on July 16, 2023; and 90,000 options were granted in 2015, with an exercise price of $1.11 per share and will expire on February 25, 2025. As of September 30, 2015, all the options granted were anti-dilutive because the exercise prices were higher than the average market price for the three and nine months ended September 30, 2015. Accordingly, they are not included in weighted average shares calculation.

The following table presents a reconciliation of basic and diluted net income per share:

	For the Three Months Ended				For the Nine Months
	September 30,				Ended September 30,
	2015		2014		2015		2014

Net income	$	8,764,990	$	5,233,998	$	15,919,631	$	39,241,609

Weighted average number of common shares outstanding - Basic		65,963,502		65,953,462		65,963,502		65,905,667

Effect of dilutive securities:
Unexercised warrants and options		-		184,106		-		379,703

Weighted average number of common shares outstanding - Diluted		65,963,502		66,137,568		65,963,502		66,285,370

Earnings per share-Basic	$	0.13	$	0.08	$	0.24	$	0.60
Earnings per share-Diluted	$	0.13	$	0.08	$	0.24	$	0.59