NOTE 13 – BASIC AND DILUTED NET INCOME PER SHARE

Basic earnings per share and diluted earnings per share have been calculated in accordance with ASC 260 on computation of earnings per share for the three and nine months ended September 30, 2026 and 2025 as follows: 

On March 26, 2026, the Company issued 713,818 fully paid, immediately exercisable pre-funded warrants in a registered direct offering; such warrants remain exercisable until fully exercised. The pre-funded warrants are classified as equity and recorded in additional paid-in capital. For the three and nine months ended September 30, 2026, 3,500 and 713,818 warrants, respectively, were exercised. As of September 30, 2026, no pre-funded warrants remained outstanding, and all underlying shares had been registered. In accordance with ASC 260-10-45-13, because the warrants require only nominal additional consideration upon exercise, the underlying shares are considered outstanding for basic earnings per share. Accordingly, the Company has included such shares in the weighted-average shares outstanding for basic net income (loss) per share for the three and nine months.

Diluted earnings per share (EPS) is computed using the treasury stock method for all potentially dilutive securities. In periods with net loss, unvested RSUs are not included in the diluted EPS calculation because their inclusion would be anti-dilutive. In periods with net income, only those equity awards that are considered dilutive and outstanding are included in the calculation. The Company currently has no outstanding vested but unexercised equity awards. See Note 11 for details of share-based compensation.