1. Unaudited Interim Financial Statements

3 Months Ended

Mar. 31, 2017

Notes

1. Unaudited Interim Financial Statements

1. UNAUDITED INTERIM FINANCIAL STATEMENTS

The unaudited condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.

Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto for the year ended December 31, 2016.

The information furnished reflects, in the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of the interim periods presented. Operating results of the interim period are not necessarily indicative of the amounts that will be reported for the year ending December 31, 2017. 

Income (Loss) Per Share

Income (loss) per share – basic is calculated by dividing net income (loss) by the weighted average number of shares of stock outstanding during the year, including shares issuable without additional consideration. Income per share – assuming dilution is calculated by dividing net income by the weighted average number of shares outstanding during the year adjusted for the effect of dilutive potential shares calculated using the treasury stock method.

Schedule of Income (Loss) Per Share
	Three Months Ended
	March 31, 2017	March 31, 2016
Numerator:
Net loss available to common shareholders	$                 (1,535)	$             (43,055)
Denominator:
Weighted average shares and share equivalents outstanding – basic	11,871,009	9,118,161
Effect of preferred stock	987,102	987,102
Effect of dilutive stock options	1,257,613	417,246
Effect of dilutive warrants	202,647	216,667
Weighted average shares and share equivalents outstanding – assuming dilution	14,318,371	10,739,176
Net loss per share — basic and diluted	$                     (.00)	$                   (.00)

 Basic and diluted loss per share were the same for the three months ended March 31, 2017 and 2016 because there was a net loss for the period.  

Schedule of Anti-dilutive Securities Excluded
	Three Months Ended
	March 31, 2017	March 31, 2016
Stock options	3,000	1,661,100
Convertible promissory notes	172,411	183,252
Total anti-dilutive securities excluded	175,411	1,844,352

Anti-dilutive securities consist of stock options and convertible promissory notes whose exercise price or conversion price, respectively, was greater than the average market price of the common stock.