EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2016

14. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and dilutive potential common shares outstanding during the period.

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Numerator:
Net income	$	2,451,737		1,144,073	$	4,664,632		1,715,344

Denominator:
Weighted-average shares outstanding
Weighted-average shares outstanding - Basic		10,632,276		9,612,496		10,632,276		9,426,026
Stock options		733,321		-		645,569		-
Weighted-average shares outstanding - Diluted		11,365,597		9,612,496		11,277,845		9,426,026

Earnings per share
-Basic		0.23		0.12		0.44		0.18
-Diluted		0.22		0.12		0.41		0.18

Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.

487,000 restricted shares of Common Stock (the “Compensation Shares”) related to the Consulting Agreement with Regeneration Capital Group, LLC (“Regeneration”) entered on November 20, 2015. These shares were placed in an escrow account and were subject to Regeneration’s performance condition. There was a dilutive effect of 487,000 shares for the three and nine months ended September 30, 2016. (See Note 15)

During the nine months ended September 30, 2016, the Company granted an aggregate of 431,525 stock options under the 2015 Incentive Stock Plan (the “2015 Plan”). In addition, on December 1, 2015 and March 1, 2016, 12,143 and 7,463 of restricted stock-based awards were granted. There was a dilutive effect of 246,321 and 158,569 shares for the three and nine months ended September 30, 2016. (See Note 15)