3. Liquidity and Earnings (Loss) Per Share

Liquidity and Capital Resources

As of March 31, 2016, we had cash and cash equivalents of $1.1 million and a working capital deficit of $14.6 million. As of December 31, 2015, we had cash and cash equivalents of $2.6 million and a working capital deficit of $13.2 million.

Our cash needs have been funded historically from loan proceeds and equity offerings. We entered into two lines of credit in 2014. Maximum borrowings under these lines of credit is $12,000,000. As of March 31, 2016, we had no additional credit available to us under our lines of credit. Furthermore, both lines of credit are scheduled to mature in 2016 at which time the full outstanding principal balance of $11,800,000 will become due and payable. Substantially all of the borrowings under the lines of credit were used to finance acquisition activity, to fund losses, and $200,000, which is not currently available to us, was used to secure a bond required to obtain a state license for our ancillary network business. Although we intend to extend the maturity dates of the two lines of credit and raise additional capital through the incurrence of additional debt or sale of equity or assets during 2016, there is no assurance that we will be successful in completing such actions.

If we are unable to obtain extensions on our lines of credit or if we are unable to raise additional funds, we will not have sufficient cash on hand to meet our cash requirements over the next 12 months. These uncertainties raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed using a two-class participating securities method. Losses have been allocated to the preferred stock, on an as-converted basis, without preference to the common stock because the dividend and liquidation rights of the preferred and common stock are equivalent on an as-converted basis. Diluted earnings (loss) per share is computed similar to basic earnings per share except for adjustments for dilutive potential common shares outstanding during the period using the treasury stock method. We computed earnings (loss) per share for both continuing and discontinued operations for the periods ended March 31, 2016, and March 31, 2015.

Basic net (loss) and diluted net (loss) per share data were computed as follows (in thousands except per share amounts):

	Three Months Ended
	March 31, 2016			March 31, 2015
Numerator:
(Loss) from continuing operations		(2,143	)		(3,662	)
Plus loss from non-controlling interests		135			-
Plus loss allocated to preferred stock		122			-
(Loss) from continuing operations, common stock for basic earnings per share		(1,886	)		(3,662	)
Less gain on change in fair value of warrant liability		-			140
(Loss) from continuing operations, common stock for diluted earnings per share		(1,886	)		(3,802	)

Income/(loss) from discontinued operations		299			(15	)

Denominator:
Weighted-average basic common shares outstanding		16,603			6,772
Assumed conversion of dilutive securities:
Common stock purchase warrants		-			80
Denominator for dilutive earnings per share - adjusted weighted-average shares		16,603			6,852

Basic net (loss) per share, continuing operations	$	(0.11	)	$	(0.54	)
Diluted net (loss) per share, continuing operations	$	(0.11	)	$	(0.55	)

Basic net income per share, discontinued operations	$	0.02		$	0.00
Diluted net income per share, discontinued operations	$	0.02		$	0.00

The following table summarizes potentially dilutive shares outstanding as of March 31, 2016 and March 31, 2015, which were excluded from the calculation due to being anti-dilutive (in thousands):

	2016		2015
Common stock purchase warrants		11,107		822
Stock options		1,644		1,334
Restricted stock units		-		89
Restricted stock		50		-