Quarterly report pursuant to Section 13 or 15(d)

3. Loss per share

v3.5.0.2
3. Loss per share
9 Months Ended
Sep. 30, 2016
Earnings Per Share [Abstract]  
3. Loss per share

Basic and diluted loss per share is computed by dividing (i) loss available to common stockholders, adjusted by an approximately $1.2 million gain on the fair value of the Company’s derivative liability for the three months ended September 30, 2015, and $1.9 million gain on the fair value of the Company’s derivative liability for the nine months ended September 30, 2015, which was attributable to 728,333 outstanding warrants issued by Fusion with a nominal exercise price that were exercised in August 2015 and dividends paid on Fusion’s preferred stock, by (ii) the weighted-average number of common shares outstanding during the period, increased by the number of common shares underlying such warrants as if such exercise had occurred at the beginning of the year.

 

The following table sets forth the computation for basic and diluted net income per share for the three and nine months ended September 30, 2016 and 2015:

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2016     2015     2016     2015  
Numerator                        
Net loss   $ (3,145,154 )   $ (4,859,491 )   $ (8,359,037 )   $ (9,835,620 )
Dividends on Series A-1, A-2 and A-4 Convertible Preferred Stock     (101,729 )     (101,730 )     (302,976 )     (301,871 )
Dividends declared on Series B-2 Convertible Preferred Stock     (183,917 )     (278,010 )     (1,799,491 )     (884,955 )
Gain on nominal warrants     -       (1,187,183 )     -       (1,930,083 )
Adjusted loss attributable to common stockholders   $ (3,430,800 )   $ (6,426,414 )   $ (10,461,504 )   $ (12,952,529 )
                                 
Denominator                                
Basic and diluted weighted average common shares outstanding     14,990,816       8,958,815       14,536,893       8,529,642  
Loss per share                                
Basic and diluted   $ (0.23 )   $ (0.72 )   $ (0.72 )   $ (1.52 )
                                 

 

For the nine months ended September 30, 2016 and 2015, the following were excluded from the calculation of diluted earnings per common share because of their anti-dilutive effects:

 

    Nine Months Ended September 30,  
    2016     2015  
Warrants     2,946,948       3,011,760  
Convertible preferred stock     2,626,518       3,992,471  
Stock options     1,157,512       677,126  
      6,730,978       7,681,357  

 

The net loss per common share calculation includes a provision for preferred stock dividends on Fusion’s outstanding Series A-1, A-2 and A-4 preferred stock (the “Series A Preferred Stock”) of approximately $102,000 for the three months ended September 30, 2016 and 2015, and approximately $302,000 for the nine months ended September 30, 2016 and 2015. Through September 30, 2016, the Board of Directors of Fusion has never declared a dividend on any series of the Series A Preferred Stock, resulting in approximately $4.6 million of accumulated preferred stock dividends. The Board of Directors has declared a dividend of $183,917 and $599,491 for the three and nine months ended September 30, 2016, respectively, on the Company’s Series B-2 preferred stock (the “Series B-2 Preferred Stock”), which, as permitted by the terms of the Series B-2 Preferred Stock, was paid in the form of 122,601 and 343,510 shares, respectively, of Fusion’s common stock. In addition, during the three months ended March 31, 2016, the Board of Directors paid an additional $1.2 million in dividends in the form of 666,667 shares of Fusion’s common stock to a holder of 5,000 shares of Series B-2 Preferred Stock in connection with their agreement to convert all of their Series B-2 Preferred Stock holdings into shares of Fusion’s common stock.