14. (Loss) Earnings per share

The Company has issued redeemable common stock which is redeemable at an amount other than fair value. Redemption of a class of common stock at other than fair value increases or decreases the carrying amount of the redeemable common stock and is reflected in basic earnings per share using the two-class method. There were no redemptions of common stock, or adjustments to the carrying value of the redeemable common stock during the three months ended September 30, 2019 or 2018. Accordingly, the two-class method presented below does not include the impact of any redemption. The Company's redeemable common stock is described in Note 14 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2019.

Basic (loss) earnings per share include shares of restricted stock that meet the definition of a participating security because these shares are eligible to receive non-forfeitable dividend equivalents at the same rate as common stock. Basic (loss) earnings per share have been calculated using the two-class method and basic (loss) earnings per share for the three months ended September 30, 2019 and 2018, reflects only undistributed earnings. The computation below of basic (loss) earnings per share excludes the net (loss) income attributable to shares of unvested restricted stock (participating non-vested restricted stock) from the numerator and excludes the dilutive impact of these unvested shares of restricted stock from the denominator.

Diluted (loss) earnings per share have been calculated to give effect to the number of shares of additional common stock that would have been outstanding if the potential dilutive instruments had been issued in each period. Stock options are included in the calculation of diluted (loss) earnings per share utilizing the treasury stock method and are not considered to be participating securities, as the stock options do not contain non-forfeitable dividend rights.

The calculation of diluted (loss) earnings per share includes the dilutive effect of a portion of the restricted stock granted to employees in August 2017, March 2018, May 2018 and September 2018 as these shares of restricted stock are considered contingently returnable shares for the purposes of the diluted earnings per share calculation and the vesting conditions in respect of a portion of the restricted stock had been satisfied. The vesting conditions for awards made in September 2018, March 2018 and August 2017 are discussed in Note 13 above and the vesting conditions for all other awards are discussed in Note 17 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2019.

The following table presents net (loss) income attributable to Net1 ((loss) income from continuing operations) and the share data used in the basic and diluted (loss) earnings per share computations using the two-class method:


		Three months ended
		September 30,
		2019			2018
		(in thousands except
		percent and
		per share data)
Numerator:
Net (loss) income attributable to Net1	$	(4,392	)	$	(5,199	)
Undistributed (loss) earnings		(4,392	)		(5,199	)
Continuing		(4,392	)		(7,145	)
Discontinued	$	-		$	1,946
Percent allocated to common shareholders (Calculation 1)		99	%		99	%
Numerator for (loss) earnings per share: basic and diluted	$	(4,347	)	$	(5,128	)
Continuing		(4,347	)		(7,047	)
Discontinued	$	-		$	1,919

Denominator:
Denominator for basic (loss) earnings per share: weighted-average common shares
outstanding		55,985			55,951
Effect of dilutive securities:		-
Stock options		-			50
Denominator for diluted (loss) earnings per share: adjusted weighted average
common shares outstanding and assumed conversion		55,985			56,001

(Loss) Earnings per share:
Basic	$	(0.08	)	$	(0.09	)
Continuing	($	0.08	)	$	(0.12	)
Discontinued	$	-		$	0.03
Diluted	$	(0.08	)	$	(0.09	)
Continuing	($	0.08	)	$	(0.12	)
Discontinued	$	-		$	0.03

(Calculation 1)
Basic weighted-average common shares outstanding (A)		55,985			55,951
Basic weighted-average common shares outstanding and unvested restricted shares expected
to vest (B)		56,568			56,723
Percent allocated to common shareholders (A) / (B)		99	%		99	%

Options to purchase 864,579 shares of the Company's common stock at prices ranging from $6.20 to $11.23 per share were outstanding during the three months ended September 30, 2019, respectively, but were not included in the computation of diluted (loss) earnings per share because the options' exercise price was greater than the average market price of the Company's common stock. The options, which expire at various dates through September 7, 2028, were still outstanding as of September 30, 2019.