Net Loss Per Common Share

6 Months Ended

Jun. 30, 2016

10. Net Loss Per Common Share

Basic earnings or loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The holders of the Series A preferred stock have rights to participation in common stock dividends, entitling the holders of Series A preferred stock to a dividend payable at the same time and rate per share as the dividend paid on common stock based the number of shares of common stock each share of Series A preferred stock would convert into if such shares had converted on the record date. The Series A preferred stock, however, does not have a contractual obligation to share in the losses of the Company, and as such, no losses were allocated to the Series A preferred stock for the purposes of the basic loss per share calculation. Prior to the Company’s incorporation, no common shares were outstanding when the Company operated as MLT.

Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company’s RSAs, stock options, shares of Series A preferred stock and convertible notes are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury method for the RSAs and stock options, and in the case of the Series A preferred stock, either the two‑class method or the if‑converted method, whichever is more dilutive. Diluted earnings with respect to the convertible notes utilizing the if‑converted method was not applicable during the three and six months ended June 30, 2016 and 2015 as no conditions required for conversion have occurred during these periods. No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti‑dilutive given the net loss reported for the three and six months ended June 30, 2016 and 2015. The following table sets forth the computation of basic and diluted loss per share (in thousands, except share and per share amounts):


	Three Months Ended				Six Months Ended
	2016		2015		2016		2015
Numerator:
Net loss	$	(1,391)	$	(1,611)	$	(3,494)	$	(3,890)
Adjustment for Series A preferred stock redemption value accretion		(150)		(149)		(299)		(2,666)
Net loss attributed to common stock holders	$	(1,541)	$	(1,760)	$	(3,793)	$	(6,556)
Denominator:
Basic and diluted weighted average common shares outstanding		3,626,825		2,952,578		3,547,795		2,533,665
Basic and diluted net loss per share	$	(0.42)	$	(0.60)	$	(1.07)	$	(2.59)

The following potential common shares were not considered in the computation of diluted net loss per share as their effect would have been anti‑dilutive:


	Three Months Ended		Six Months Ended
	2016	2015	2016	2015
Restricted stock awards	76,218	690,163	76,218	690,163
Stock options	302,842	102,130	302,842	102,130
Series A	745,637	745,637	745,637	745,637
Convertible notes	1,642,587	—	1,642,587	—