Net Income (Loss) Per Share

3 Months Ended

Mar. 31, 2021

9. Net Income (Loss) Per Share

We compute net income (loss) per share of common stock using the two-class method required for participating securities. We consider Series B Preferred Stocks and warrants to be participating securities because holders of such shares have dividend rights in the event of our declaration of a dividend for common shares. Undistributed earnings allocated to participating securities are subtracted from net income (loss) in determining net income attributable to common stockholders.

Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of our common stock outstanding.

For the calculation of diluted net income (loss) per share, net income (loss) attributable to common stockholders for basic net income (loss) per share is adjusted by the effect of dilutive securities, including awards under our equity compensation plans and change in fair value of warrant liability. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the resulting net income (loss) attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.

The numerators and denominators of the basic and diluted net income (loss) per share computations for our common stock are calculated as follows (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2021			2020
Numerator
Net income (loss)	$	891		$	(12,595	)
Less: undistributed earnings allocated to participating securities		(70	)		-
Net income (loss) attributable to common stockholders, basic	$	821		$	(12,595	)
Less: Removal of change in fair value of warrant liability		-			(8,610	)
Net income (loss) attributable to common stockholders, diluted	$	821		$	(21,205	)
Denominator
Weighted average common stock outstanding, basic		112,035			85,477
Effect of dilutive shares:
Stock-based compensation plans		1,434			-
Effect of dilutive warrants		-			171
Weighted average common stock outstanding, diluted		113,469			85,648

The following were excluded from the calculation of diluted net income (loss) per share as the effect of their inclusion would have been anti-dilutive.

	March 31,
	2021		2020
Outstanding securities not included in diluted net income (loss) per share calculation (in thousands):
Stock options and stock awards		7,915		11,443
Series B Convertible Preferred Stock (as converted to common stock)		4,140		4,840
Warrants (as exercisable into common stock)		5,091		-
Total		17,146		16,283