Note 3 – Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share is computed by dividing (i) loss available to common stockholders, by (ii) the weighted-average number of shares of common stock outstanding during the period. Basic loss per share excludes dilution and is computed by dividing loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. The loss per share for the three and six months ended June 30, 2019 and the six months ended June 30, 2018 excluded securities or other contracts to issue the Company’s common stock because the results were anti-dilutive.

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for each of the three and six months ended June 30, 2019 and 2018:

Diluted loss per share as reflected in the table above excludes all dilutive potential shares if their effect is anti-dilutive. For the six months ended June 30, 2019 and 2018, the following table sets forth the computation of the following potential common stock equivalents excluded from the calculation of diluted loss per share as their effect was anti-dilutive:

The terms of certain of the warrants, convertible preferred stock and convertible debentures issued by the Company provide for reductions in the per share exercise prices of the warrants and the per share conversion prices of the debentures and preferred stock (if applicable and subject to a floor in certain cases), in the event that the Company issues common stock or common stock equivalents (as that term is defined in the agreements) at an effective exercise/conversion price that is less than the then exercise/conversion prices of the outstanding warrants, preferred stock or debentures, as the case may be. In addition, many of these equity-based securities contain exercise or conversion prices that vary based upon the price of the Company’s common stock on the date of exercise/conversion (see Notes 12 and 13). These provisions have resulted in significant dilution of the Company’s common stock and have given rise to reverse splits of the Company’s common stock. As a result of these down round provisions, the outstanding common stock and potential common stock equivalents totaled 759.0 billion at December 5, 2019. See Notes 13 and 19 regarding a discussion of the Company’s common stock and potential common stock equivalents.