3. INCOME (LOSS) PER SHARE

We compute basic income (loss) per share using the weighted average number of common shares outstanding. The Company has two categories of dilutive potential common shares: Series A preferred shares issued in May 2011 in connection with our registered direct offering and shares issuable upon exercise of options. We compute diluted earnings per share using the if-converted method for preferred shares and the treasury stock method for stock options, respectively. Shares issuable upon exercise of 297 options were not considered in computing diluted income (loss) per share for the three months ended December 31, 2018 because they were anti-dilutive. Shares issuable upon exercise of 785 options were not considered in computing diluted income (loss) per share for the three months ended December 31, 2019 because they were anti-dilutive.

The following table reconciles our computation of basic net loss per share to diluted loss per share:


	Three Months Ended
	December 31,
	2019		2018
Basic net loss per share:
Net loss applicable to common shareholders	$	(1,426)	$	(85)
Weighted average common shares outstanding		10,669		10,245
Basic net loss per share	$	(0.13)	$	(0.01)
Diluted net loss per share:
Diluted net loss applicable to common shareholders	$	(1,426)	$	(85)
Weighted average common shares outstanding		10,669		10,245
Plus: Incremental shares from assumed conversions:
Series A preferred shares		—		—
Dilutive stock options/shares		—		—
Diluted weighted average common shares outstanding		10,669		10,245
Diluted net loss per share	$	(0.13)	$	(0.01)