NET LOSS PER COMMON SHARE

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

NET LOSS PER COMMON SHARE

            Basic loss per common share is calculated by dividing net loss available to common shareholders for the period by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is calculated by dividing net loss available to common shareholders for the period by the weighted-average number of common shares outstanding during the period, adjusted to include, if dilutive, potential dilutive shares consisting of convertible preferred stock, convertible related party lines of credit, stock options and warrants, calculated using the treasury stock and if-converted methods.  For diluted loss per share calculation purposes, the net loss available to common shareholders is adjusted to add back any preferred stock dividends and any interest on convertible debt reflected in the condensed consolidated statement of operations for the respective periods.

For the three and nine month periods ended September 30, 2017, net loss available to common shareholders includes an adjustment for the Preferred Stock Exchange. Pursuant to the guidance in ASC 260-10-S99-2, Earnings Per Share – SEC Materials – SEC Staff Announcement: The Effect on the Calculations of Earnings Per Share for a Period That Includes the Redemption or Induced Conversion of Preferred Stock, the Company recorded approximately $1,245,000 in fair value differential as adjustments in the computation of basic and diluted loss per share in the Company’s Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2017.

The table below presents the computation of basic and diluted loss per share:

(Amounts in thousands except share and per share amounts)	Three Months Ended September 30,						Nine months Ended September 30,
	2017			2016			2017			2016
Numerator for basic and diluted loss per share:
Net loss	$	(2,390	)	$	(2,431	)	$	(7,668	)	$	(6,822	)
Preferred dividends		(553	)		(317	)		(1,575	)		(986	)
Preferred stock exchange		(1,245	)		—			(1,245	)		—
Net loss available to common shareholders	$	(4,188	)	$	(2,748	)	$	(10,488	)	$	(7,808	)
Denominator for basic and dilutive loss per share – weighted-average shares outstanding		93,197,689			94,550,721			92,538,582			94,309,309
Net loss	$	(0.03	)	$	(0.03	)	$	(0.08	)	$	(0.07	)
Preferred dividends		(0.00	)		(0.00	)		(0.02	)		(0.01	)
Preferred stock exchange		(0.01	)		—			(0.01	)		—
Basic and diluted loss per share available to common shareholders	$	(0.04	)	$	(0.03	)	$	(0.11	)	$	(0.08	)

The following potential dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding as their effect would have been antidilutive:

Potential Dilutive securities	Three and Nine Months Ended September 30,
	2017		2016
Related party lines of credit		5,118,066		1,759,888
Convertible preferred stock		27,021,784		7,696,123
Stock options		6,116,318		6,529,510
Warrants		150,000		425,000
Total potential dilutive securities		38,406,168		16,410,521