NOTE 12. NET INCOME (LOSS) PER SHARE OF COMMON STOCK

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

NOTE 12. NET INCOME (LOSS) PER SHARE OF COMMON STOCK

NOTE 12. NET INCOME (LOSS) PER SHARE OF COMMON STOCK

In the accompanying condensed consolidated financial statements, basic net income (loss) per share of common stock is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the period. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Convertible debt that is convertible into 101,137,509 and 333,333 shares of the Company’s common stock are not included in the computation, along with 250,000,000 and 250,000,000 of the Company’s preferred stock, for the three and nine months ended September 30, 2019 and 2018, respectively. Additionally, there are 16,666,667 and zero warrants that are exercisable into shares of stock as of September 30, 2019 and September 30, 2018, respectively, and there is an outstanding issue with Iliad, a former noteholder that claims warrants as being issued and outstanding that could result in 1,308,286 shares being issued. The Company is currently in negotiations over the issue. As warrants are exercisable above the current market rate, they would be excluded from any dilute share calculations.

The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the three and nine-month period ended September 30, 2019 and 2018:

		Nine-month period ended September 30,					Three-month period ended September 30,
		2019			2018		2019			2018
Net income (loss)	$	(7,113,493)		$	(2,243,387)	$	1,808,517		$	(1,102,505)
Weighted average shares used for basic earnings per share	1,176,847,590			1,005,198,351		1,343,286,588			1,010,330,434
Incremental diluted shares	-		*	-		-		2,193,943,809	-		*
Weighted average shares used for diluted earnings per share	1,176,847,590			1,005,198,351		3,537,230,397			1,010,330,434
Net income (loss) per share:
Basic	$	(0.01)		$	(0.00)	$	0.00		$	(0.00)
Diluted	$	(0.01)		$	(0.00)	$	0.00		$	(0.00)

*The shares associated with convertible debt, preferred stock, stock options and stock warrants are not included because the inclusion would be anti-dilutive (i.e., reduce the net loss per common share).