3. Earnings Per Share

Basic earnings per common share are computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options, unvested restricted stock, common stock warrants, and preferred stock) were exercised or converted into common stock or resulted in the issuance of common stock (net of any assumed repurchases) that then shared in the earnings of the Company, if any. This is computed by dividing net earnings by the combination of dilutive common share equivalents, which is comprised of shares issuable under outstanding warrants, the conversion of preferred stock, and the Company’s share-based compensation plans, and the weighted average number of common shares outstanding during the reporting period. Since the Company is in a net loss position, all common stock equivalents would be considered to be anti-dilutive and are, therefore, not included in the determination of diluted earnings per share. Accordingly, basic and diluted loss per share are the same.

The dilutive potential common shares are summarized as follows:


	At March 31,
	2017	2016
Stock options outstanding (1)	14,857,592	11,693,286
Restricted stock outstanding	13,333	204,444
Common stock warrants (2)	14,501,600	4,074,288
Preferred stock (3)	15,102,981	5,554,594
Number of dilutive potential common shares	44,475,506	21,526,612

(1)

During the three months ended March 31, 2017 and 2016, the Company granted 136,352 and 15,000 stock options, respectively.

(2)

In May 2011, the Company issued 7,128,563 warrants as part of an underwritten public offering with an exercise price of $0.93 per warrant. As a result of additional public offerings, and pursuant to the effect of the anti-dilution provisions of these warrants, the number of warrants increased to 22,995,365. Of these warrants issued in May 2011, zero and 74,188 were unexercised as of March 31, 2017 and 2016, respectively.

In February 2013, the Company issued 23,637,500 warrants as part of an underwritten public offering with an exercise price of $0.15 per warrant. Of these warrants issued in February 2013, 100 were unexercised as of March 31, 2017 and 2016.

In January 2014, the Company issued 4,000,000 warrants as part of an underwritten public offering with an exercise price of $4.00 per warrant. In December 2016, as a result of additional public offerings, and pursuant to the effect of the anti-dilution provisions of these warrants, the exercise price of the $4.00 warrants was reduced to $0.65. Of these warrants issued in January 2014, none have been exercised as of March 31, 2017 and 2016. During April 2017, all 4,000,000 warrants were exercised, as discussed in Note 12, Subsequent Events.

In December 2016, the Company issued 10,501,500 warrants as part of two concurrent underwritten public offerings with an exercise price of $1.50 per warrant. Of these warrants issued in December 2016, none have been exercised as of March 31, 2017. During April 2017, all 10,501,500 warrants were exercised, as discussed in Note 12, Subsequent Events.

(3)

The preferred stock amount represents the dilutive potential common shares of the Series C and D redeemable convertible preferred stock, based on the conversion price of the preferred stock as of March 31, 2017 and 2016, respectively. Of the 10,431 Series C redeemable preferred stock issued in May 16, 2013, 5,200 had been converted to common stock during the year ended December 31, 2013, with the remainder still outstanding. Of the 18,500 Series D redeemable convertible preferred stock issued on December 22, 2016, 3,700 shares have been redeemed during the three months ended March 31, 2017, with the remainder still outstanding. During April 2017, all of the outstanding shares were converted, as discussed in Note 12, Subsequent Events.