NET LOSS PER SHARE

12 Months Ended

Dec. 31, 2014

Earnings Per Share:

NET LOSS PER SHARE

17 NET LOSS PER SHARE

Basic loss per share is based on the weighted-average number of common shares outstanding during each period. Diluted loss per share is based on basic shares as determined above plus common stock equivalents, including convertible preferred shares and convertible notes as well as the incremental shares that would be issued upon the assumed exercise of in-the-money stock options using the treasury stock method. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share. For the year ended December 31, 2014 and 2013, all stock options, unvested restricted stock awards, warrants, convertible preferred stock and convertible notes were excluded from the computation of diluted net loss per share. Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive are as follows:

	Year endedDecember 31, 2014(Shares)		Year endedDecember 31, 2013(Shares)
Options to purchase shares of common stock		380,950		11,452,960
Restricted stock awards – unvested		13,000,000		-
Warrants to purchase shares of common stock		6,339,498		-
Series A-1 convertible preferred shares		35,125,000		38,875,000
Series B convertible preferred shares		7,500,000		-
Convertible long term notes		636,010		19,443,750
Convertible short term notes*		-		-
		62,981,458		69,771,710

* Convertible short term notes have variable conversion pricing dependent upon share prices prior to conversion, see note 9 above.

As of December 31, 2014, short term notes with a principal amount outstanding of $191,000 are convertible into common shares at discounts ranging from 58% to 62% of average trading prices immediately prior to conversion. The closing share price as of December 31, 2014 was $0.17. These short-term notes do not have a floor or a capped conversion price.