Earnings Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share

Earnings Per Share

Note 12 - Earnings Per Share

Basic earnings per share is computed by dividing net loss available to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is based on the treasury stock method and computed by dividing net loss available to common stockholders by the diluted weighted-average shares of common stock outstanding during each period. The Company’s potentially dilutive shares include stock options and warrants for the shares of common stock. The potentially dilutive shares are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when the effect is dilutive. The investor warrants are treated as equity in the calculation of diluted earnings per share in both the computation of the numerator and denominator. The following table sets forth the calculations of basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Net (loss) income	$	(2,731,000)	$	421,000	$	(7,910,000)	$	(5,391,000)
Less: decrease in fair value of investor warrants		—		(3,981,000)		(156,000)		(822,000)
Loss available to common stockholders	$	(2,731,000)	$	(3,560,000)	$	(8,066,000)	$	(6,213,000)
Basic and diluted weighted-average common shares outstanding		166,393,000		115,031,000		162,723,000		113,079,000
Add: dilutive effect of equity instruments		—		3,739,000		1,183,000		4,271,000
Diluted weighted-average shares outstanding		166,393,000		118,770,000		163,906,000		117,350,000
Earnings per share – basic	$	(0.02)	$	0.00	$	(0.05)	$	(0.05)
Earnings per share – diluted	$	(0.02)	$	(0.03)	$	(0.05)	$	(0.05)

The potentially dilutive shares of common stock that have been excluded from the calculation of net loss per share because of the anti-dilutive effect are as follows:

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Outstanding stock options	5,375,000	5,440,000	5,141,000	5,414,000
Warrants to purchase shares of common stock	6,866,000	19,826,000	5,917,000	19,320,000
Total potentially dilutive shares of common stock	12,241,000	25,266,000	11,058,000	24,734,000