17. Earnings per share (Basic and Dilutive)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings per share (Basic and Dilutive)

17. Earnings per share (Basic and Dilutive)

The Company computes net (loss) income per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted Earnings Per Share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. These potential dilutive shares include 2,215,500 vested stock options and 9,800,000 stock purchase warrants. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations for the years ended December 31, 2019 and 2018.

	2019			2018
Numerator:
Net income (loss)	$	(16,975,742	)	$	948,915
Denominator:
Weighted-average shares of common stock		33,740,557			25,121,896
Dilutive effect of warrants		–			2,647,461
Diluted weighted-average shares of common stock		33,740,557			27,769,357
Net income (loss) per common share from:
Basic	$	(0.50	)	$	0.04
Diluted	$	(0.50	)	$	0.03

Dilutive-potential common share equivalents are excluded from the computation of net loss per share in loss periods, as their effect would be antidilutive. As the Company has incurred a loss from operations in 2019, shares issuable pursuant to equity awards were excluded from the computation of diluted net loss per share in the accompanying consolidated statements of operations, as their effect is anti-dilutive.