FITLIFE BRANDS, INC. Earnings Per Share Disclosure
Basic income per share is calculated by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing net income attributable to common stockholders by the weighted average fully diluted number of shares of common stock outstanding during the period. For the year ended December 31, 2016, the following potential shares of common stock were excluded in the number of shares of common stock outstanding for the calculation of diluted income per share. For the year ended December 31, 2015, the following potential shares of common stock were included in the number of the shares of common stock outstanding for the calculation of diluted income per share.
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| Warrants | 102,287 | 98,742 | ||||||
| Options | 1,008,132 | 614,607 | ||||||
| Total | 1,110,418 | 713,349 | ||||||
The following table represents the computation of basic and diluted losses per share at December 31, 2016 and 2015:
| December 31, | December 31, | |||||||
| 2016 | 2015 | |||||||
| Net income (losses) available for common shareholders | 368,078 | (1,165,940 | ) | |||||
| Basic weighted average common shares outstanding | 10,429,452 | 8,677,433 | ||||||
| Basic income (loss) per share | 0.04 | (0.13 | ) | |||||
| Diluted weighted average common shares outstanding | 11,521,344 | 8,677,433 | ||||||
| Diluted income (loss) per share | 0.03 | (0.13 | ||||||
Net loss per share is based upon the weighted average shares of common stock outstanding.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.