Note 11 - Earnings Per Share

In August 2019, the Company’s management determined that there was an error with respect to calculating net income (loss) per common share: diluted, or diluted earnings per share for the three and nine months ended September 30, 2018. In the previously issued Form 10-Q for the three and nine months ended September 30, 2018, the Company calculated basic and diluted earnings per share in the same manner, which was incorrect. The impact of this error to the Company’s previously reported diluted earnings per share for the three and nine months ended September 30, 2018 was an over statement of $0.08 and $0.45, respectively. Based on the SEC Staff Accounting Bulletin (“SAB”) No. 99, Materiality, the Company assessed the materiality of the misstatement on both a quantitative and qualitative basis. Based on this assessment, the Company’s management determined that the diluted earnings per share calculation does not constitute a material misstatement and, as such, an amendment to the previously filed Quarterly Reports on Form 10-Q was not necessary. As such, the Company has revised the previously issued financial statements for the three and nine months ended September 30, 2018 to correct for this error.

Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income (loss) available to common stockholders by the diluted weighted-average shares of common stock outstanding during each period. The Company’s potential dilutive shares include stock options and warrants for the shares of common stock. The investor warrants are treated as equity in the calculation of diluted earnings per share in both the computation of the numerator and denominator. Since the Company operates at a net loss after adjusting for the derivative gain, all potentially dilutive shares are considered anti-dilutive and are excluded from the calculation of diluted net loss per share. The following table sets forth the calculations of basic and diluted earnings per share for the three and nine months ended September 30, 2019 and 2018:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net Income (loss)	$	(7,219,215)	$	5,801,220	$	(12,610,083)	$	32,460,894
Less: decrease (increase) in fair value of investor warrants		—		(7,744,708)		—		(41,110,851)
Income (loss) available to common stockholders	$	(7,219,215)	$	(1,943,488)	$	(12,610,083)	$	(8,649,957)

Basic and diluted weighted-average common shares outstanding		142,207,862		96,930,270		122,895,080		88,782,837
Add: dilutive effect of equity instruments		—		18,415,848		—		22,587,902
Diluted weighted-average shares outstanding		142,207,862		115,346,118		122,895,080		111,370,739
Earnings per share - basic	$	(0.05)	$	0.06	$	(0.10)	$	0.37
Earnings per share - diluted	$	(0.05)	$	(0.02)	$	(0.10)	$	(0.08)