Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per common share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per common share is computed using the weighted average number of common shares and potential dilutive common shares that were outstanding during the period. Potential dilutive common shares consist of outstanding stock options, outstanding stock warrants, and convertible preferred stock.

The following table sets forth the computation of basic and diluted earnings (loss) per share:

	Three months ended						Nine months ended
	September 30						September 30
	2019			2018			2019		2018
Numerator:
Net income (loss)	$	(165,857	)	$	(542,301	)	$	69,682	$	(1,758,560	)
Denominator:
Denominator for basic earnings (loss) per share – weighted average shares		1,746,000			1,845,000			1,746,000		1,845,000

Dilutive effect of employee stock options and other warrants		-			-			-		-

Denominator for diluted earnings (loss) per share – adjusted weighted average shares		1,746,000			1,845,000			1,746,000		1,845,000

Basic earnings (loss) per share	$	(0.09	)	$	(0.29	)	$	0.04	$	(0.95	)
Diluted earnings (loss) per share	$	(0.09	)	$	(0.29	)	$	0.04	$	(0.95	)

Options and warrants to purchase

86,316

and

85,203

shares of common stock for the

three

months and

nine

months ended

September 30, 2019,

respectively, were

not

included in the denominator for diluted earnings (loss) per share because their effect would be antidilutive or because the shares were deemed contingently issuable. Options and warrants to purchase

120,242