3. NET LOSS PER SHARE

12 Months Ended

Dec. 31, 2011

NOTE 3 – NET LOSS PER SHARE

Convertible preferred stock and outstanding options and warrants were not considered in the calculation for diluted loss per share for the years ended December 31, 2011 and 2010 because the effect of their inclusion would be anti-dilutive.

	2011								2010
	Loss			Shares		Per Share			Loss			Shares		Per share
Net (loss)		(5,626,254	)							(9,131,354	)
Deemed Dividend series K Preferred stock and warrants		(1,967,699	)
Preferred stock dividends		(196,978	)

Basic loss per share

Loss available to Common Stockholders		(7,790,931	)		110,746,222		(0.07	)		(9,131,354	)		66,414,822		(0.14	)

Effect of dilutive securities		N/A								N/A

Diluted loss per share		(7,790,931	)		110,746,222		(0.07	)		(9,131,354	)		66,414,822		(0.14	)

These following securities were excluded from the computation of diluted loss per share because the effect of their inclusion would be anti-dilutive.

	2011		2010
Options		2,241,240		11,637,388
Warrants		52,893,843		-
Convertible Notes		53,327,620		5,871,429
Preferred Series K		25,127,451
Total		133,590,154		17,508,817

On December 23rd, 2011 the Company received majority consent to:

●	Amend the Certificate of Designation of the Corporation for the Series K Preferred Stock (the “Certificate of Designation”)

● to eliminate paragraph (f) of Section 9 of the Certificate of Designation, “Protective Provisions,” which limits the Company’s ability to enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, other than “Permitted Indebtedness”

●	Amend the Security Purchase Agreement for the Series K Preferred Stock (the “Security Purchase Agreement”)

i.	To eliminate paragraph 8.2 “Subsequent Equity Sales,” in its entirety;

ii.	To eliminate paragraph 8.3 “Participation in Future Financing ,” in its entirety;

In consideration of same, the Company agreed:

●	To reduce the conversion price of its Series K Preferred to 3 cents per share.

●	To exchange every 5 Warrants (of the X, Y and Z Series) into 1 share of common stock.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

New Leaf Brands, Inc. 10-K