Note J - Earnings Per Share

In periods in which the Company has net income, the Company is required to calculate earnings per share (“EPS”) using the

two

-class method. The

two

-class method is required because the Company's Series A Preferred Stock is considered a participating security with objectively determinable and non-discretionary dividend participation rights. Series A Preferred stockholders have the right to participate in dividends above their

five

percent dividend rate should the Company declare dividends on its common stock at a dividend rate higher than the

five

percent (on an as-converted basis). Under the

two

-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and the preferred stockholders. The weighted-average number of common and preferred stock outstanding during the period is then used to calculate EPS for each class of shares.

In periods in which the Company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The

two

-class method is

not

used, because the calculation would be anti-dilutive.

Reconciliations of basic and diluted EPS were as follows:

	Three Months Ended September 30,
In thousands, except per share amounts	2020			2019
Numerator:
Net loss	$	(1,621	)	$	(5,988	)
Less: Preferred stock dividends		125			125
Numerator for basic EPS: loss attributable to common stockholders		(1,746	)	$	(6,113	)

Denominator:
Basic EPS denominator: weighted-average common shares outstanding		6,523			6,291

Diluted EPS denominator		6,523			6,291

Basic loss per Common Share	$	(0.27	)	$	(0.97	)
Diluted loss per Common Share	$	(0.27	)	$	(0.97	)

For the

three

months ended

September 30, 2020

and

2019

, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation:

0.1

million and

0.1

million shares of anti-dilutive market price options;

0.7

million and

0.2

million of anti-dilutive unvested shares; and

1.0

million and

1.0

million shares of anti-dilutive Series A Preferred Stock (as if converted).

	Nine Months Ended September 30,
In thousands, except per share amounts	2020			2019
Numerator:
Net loss	$	(2,738	)	$	(23,318	)
Less: Preferred stock dividend		372			371
Numerator for basic EPS: loss attributable to common stockholders		(3,110	)		(23,689	)

Denominator:
Basic EPS denominator: weighted-average common shares outstanding		6,432			6,277

Diluted EPS denominator		6,432			6,277

Basic loss per Common Share	$	(0.48	)	$	(3.77	)
Diluted loss per Common Share	$	(0.48	)	$	(3.77	)

For the

nine

months ended

September 30, 2020

and

2019

, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation:

thousand and

0.1

million shares of anti-dilutive market price options;

0.4

million and

0.2

million of anti-dilutive unvested shares; and

1.0

million and

1.0

shares of anti-dilutive Series A Preferred Stock (as if converted).