Note 3 – Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing the earnings (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (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 following table sets forth the computation of the Company’s basic and diluted net income (loss) per share (unaudited) during the three months ended March 31, 2023 and 2022:

Schedule of Earnings Per Share

Diluted income (loss) per share excludes all dilutive potential shares if their effect is anti-dilutive. As of March 31, 2023 and 2022, the following potential common stock equivalents were excluded from the calculation of diluted income (loss) per share as their effect was anti-dilutive:

 Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

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 floors 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 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 6, 9 and 10). These provisions have resulted in significant dilution of the Company’s common stock.

As a result of the Voting Agreement and Irrevocable Proxy (the “Voting Agreement”) discussed in Note 10 and the November 5, 2021 Amendment to the Company’s Certificate of Incorporation, as amended, to provide that the number of authorized shares of the Company’s common stock or preferred stock may be increased or decreased (but not below the number of shares then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Company, which is more fully discussed in Note 1, as of the date of filing this report, the Company believes that it has the ability to ensure that it has and or can obtain sufficient authorized shares of its common stock to cover all outstanding rights to acquire potentially dilutive common shares.

As a result of these down round provisions, the potential common stock and common stock equivalents totaled 1.0 trillion at May 9, 2023. See Note 10 for a discussion of the number of shares of the Company’s authorized common and preferred stock.