Retractable Technologies Inc (RVP)

[Enterprising Investor]

Gain on Extinguishment of Preferred Stock was $2.3 million.

Earnings per share were positively affected by our acquisition of 200,000 shares of IV Class B convertible preferred stock. This preferred stock was purchased from a stockholder as of November 30, 2015. The shareholder was issued 728,000 shares of our Common Stock as consideration and agreed to waive all unpaid dividends in arrears associated with the tendered preferred stock, equaling $3.1 million. Under the guidelines of ASC 260-10-S99-2, Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock, we reflected the gain on extinguishment of this preferred stock in net income per common stockholder used to calculate earnings per share. This accounting treatment had the effect of increasing the income applicable to common shareholders by $2.3 million in 2015 which had a material effect on the determination of earnings per share. As a result, Basic earnings per share was $0.21 for 2015.