Note 10 - Net Loss Per Share

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 10: NET LOSS PER SHARE

The Company follows the two-class method when computing net loss per share as the Company has issued warrants and preferred stock that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding. In addition, in computing the dilutive effect of convertible securities, the numerator is adjusted to add back any convertible preferred dividends. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares that would have been outstanding during the period assuming the issuance of common shares for all potential dilutive common shares outstanding. Potential common shares consist of potential future exercises of outstanding stock options and common stock warrants. Because the inclusion of potential common shares would be anti-dilutive for all periods presented, they have been excluded from the calculation.

The Company’s common stock warrants and preferred stock contractually entitles the holders of such securities to participate in dividends but do not contractually require the holders of such securities to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such participating securities. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to common stockholders for the three and nine months ended September 30, 2021 and 2020.

The following table summarizes the Company’s calculation of net loss per common share: 

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Numerator
Net loss attributable to common shareholders	$	(5,197,145	)	$	(3,491,071	)	$	(15,774,462	)	$	(10,344,633	)
Denominator
Weighted average common shares outstanding used to compute net loss per share, basic and diluted		126,537,544			10,162,770			113,689,961			9,496,222
Net loss per share of common stock, basic and diluted:	$	(0.04	)	$	(0.34	)	$	(0.14	)	$	(1.09	)

The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share, because including them would be anti-dilutive: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Options to purchase common stock		10,043,575		7,158,387		8,682,997		5,825,082
Series B convertible preferred stock		166,142		177,562		172,909		183,544
Warrants to purchase common stock		22,356,105		1,070,028		24,773,777		1,070,028
		32,565,822		8,405,977		33,629,683		7,078,654