EARNINGS PER SHARE

In accordance with ASC 260, outstanding instruments that contain rights to non-forfeitable dividends are considered participating securities. The Company is required to apply the two-class method or the treasury stock method of computing basic and diluted earnings per share when there are participating securities outstanding. The Company has determined that outstanding unvested restricted shares issued under the Manager Equity Plan are participating securities, and they are therefore included in the computation of basic and diluted earnings per share. The following tables provide additional disclosure regarding the computation for the three and nine months ended September 30, 2018 and September 30, 2017:



	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
Net income (loss)			$	4,353,026			$	(4,256,337	)

Less dividends paid:
Common stock	$	1,421,260			$	3,320,889
Preferred stock	880,509				880,509
			2,301,769				4,201,398
Undistributed earnings (deficit)			$	2,051,257			$	(8,457,735	)



	Unvested Share-Based Payment Awards		Common Stock		Unvested Share-Based Payment Awards			Common Stock
Distributed earnings	$	0.06	$	0.06	$	0.15		$	0.15
Undistributed earnings (deficit)	0.09		0.09		(0.38		)	(0.38		)
Total	$	0.15	$	0.15	$	(0.23	)	$	(0.23	)



	Nine Months Ended September 30, 2018					Nine Months Ended September 30, 2017
Net income (loss)			$	(5,822,037	)			$	(4,183,767	)

Less dividends paid:
Common stock	$	5,156,936				$	8,582,666
Preferred stock	2,631,744					2,631,744
			7,788,680					11,214,410
Undistributed earnings (deficit)			$	(13,610,717	)			$	(15,398,177	)



	Unvested Share-Based Payment Awards			Common Stock			Unvested Share-Based Payment Awards			Common Stock
Distributed earnings	$	0.22		$	0.22		$	0.45		$	0.45
Undistributed earnings (deficit)	(0.58		)	(0.58		)	(0.80		)	(0.80		)
Total	$	(0.36	)	$	(0.36	)	$	(0.35	)	$	(0.35	)

Pursuant to an agreement dated January 18, 2018, XL investments agreed to terminate all of its previously held warrants to purchase 3,753,492 shares of common stock held by it, and therefore no adjustment was needed for the calculation of diluted earnings per share for the three months and nine months ended September 30, 2018. No adjustment was required for the calculation of diluted earnings per share for the three months and nine months ended September 30, 2017, for the warrants described in Note 17 because the warrants’ exercise price was greater than the average market price of the common shares for the period, and thereby anti-dilutive. For the three months ended September 30, 2018 the weighted average number of shares of common stock outstanding to calculate the basic and diluted earnings per share was 23,687,273 and for the three months ended September 30, 2017, the weighted average number of shares of common stock outstanding to calculate the basic and diluted earnings per share was 22,139,258. For the nine months ended September 30, 2018, the weighted average number of shares of common stock outstanding to calculate the basic and diluted earnings per share was 23,588,688 and for the nine months ended September 30, 2017, the weighted average number of shares of common stock outstanding to calculate the basic and diluted earnings per share was 19,342,188.