EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2019

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, 2019 and September 30, 2018:


	Three Months Ended September 30, 2019						Three Months Ended September 30, 2018
Net income (loss)			$	2,157,748			$	4,353,026

Less dividends:
Common stock	$	1,776,575			$	1,421,260
Preferred stock	3,792				880,509
Deemed dividend on preferred stock related to redemption	—				—
			1,780,367				2,301,769
Undistributed earnings (deficit)			$	377,381			$	2,051,257


	Unvested Share-Based Payment Awards		Common Stock		Unvested Share-Based Payment Awards		Common Stock
Distributed earnings	$	0.08	$	0.08	$	0.06	$	0.06
Undistributed earnings (deficit)	0.01		0.01		0.09		0.09
Total	$	0.09	$	0.09	$	0.15	$	0.15


	Nine Months Ended September 30, 2019						Nine Months Ended September 30, 2018
Net income (loss)			$	5,026,685			$	(5,822,037)

Less dividends:
Common stock	$	5,211,286			$	5,156,936
Preferred stock	488,056				2,631,744
Deemed dividend on preferred stock related to redemption	3,093,028				—
			8,792,370				7,788,680
Undistributed earnings (deficit)			$	(3,765,685)			$	(13,610,717)


	Unvested Share-Based Payment Awards		Common Stock		Unvested Share-Based Payment Awards		Common Stock
Distributed earnings	$	0.22	$	0.22	$	0.22	$	0.22
Undistributed earnings (deficit)	—		(0.16)		—		(0.58)
Total	$	0.22	$	0.06	$	0.22	$	(0.36)

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, 2019. No adjustment was required for the calculation of diluted earnings per share for the three months and nine months ended September 30, 2018, for the warrants described in Note 16 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, 2019, the weighted average number of shares of common stock outstanding to calculate the basic and diluted earnings per share was 23,687,664 and 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. For the nine months ended September 30, 2019, the weighted average number of shares of common stock outstanding to calculate the basic and diluted earnings per share was 23,687,664 and for the nine months ended September 30, 2018, the weighted average number of shares of common stock outstanding to calculate basic and diluted earnings per share was 23,588,688.