Note 8 – Earnings (Loss) Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or otherwise result in the issuance of common stock that shared in the earnings of the entity. Diluted EPS also utilizes the treasury stock method which prescribes a theoretical buy back of shares from the theoretical proceeds of all options outstanding during the period. Since there are options outstanding, fluctuations in the actual market price can have a variety of results for each period presented. Options outstanding to acquire shares of our common stock at September 30, 2020 and 2019 were 3,532,000 and 2,900,000, respectively. Warrants outstanding to acquire shares of our common stock at September 30, 2020 and 2019 were 400,000 and 0, respectively.

Diluted EPS also utilizes the if-converted method which prescribes a theoretical conversion of the convertible securities for the theoretical proceeds of all convertible securities during the period. For the three and nine months ended September 30, 2020, there were 1,000,000 potentially dilutive common stock equivalents that were excluded from the loss per share computation as a consequence of their anti-dilutive effect

For the three and nine months ended September 30, 2020, dilutive loss per share were the same as basic earnings per share due to the exclusion of common stock equivalents. For the three and nine months ended September 30, 2020, there were 4,932,000 potentially dilutive common stock equivalents that were excluded from the loss per share computation as a consequence of their anti-dilutive effect which in a net loss position would have an anti-dilutive effect on loss per share. For the three months ended September 30, 2019, there were 2,800,000 potentially dilutive common stock equivalents that were excluded from the loss per share computation as a consequence of their anti-dilutive effect.