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 773 options and 17 common shares issuable upon conversion of preferred shares were not considered in computing diluted income (loss) per share for the three and nine months ended June 30, 2019 because they were anti-dilutive. Shares issuable upon exercise of 751 options and 12 common shares issuable upon conversion of preferred shares were not considered in computing diluted income (loss) per share for the three and nine months ended June 30, 2020 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				Nine Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Basic net loss per share:
Net loss applicable to common shareholders	$	(879)	$	(426)	$	(2,893)	$	(1,080)
Weighted average common shares outstanding		10,910		10,493		10,807		10,343
Basic net loss per share	$	(0.08)	$	(0.04)	$	(0.27)	$	(0.10)
Diluted net loss per share:
Diluted net loss applicable to common shareholders	$	(879)	$	(426)	$	(2,893)	$	(1,080)
Weighted average common shares outstanding		10,910		10,493		10,807		10,343
Plus: Incremental shares from assumed conversions:
Series A preferred shares		—		—		—		—
Dilutive stock options/shares		—		—		—		—
Diluted weighted average common shares outstanding		10,910		10,493		10,807		10,343
Diluted net loss per share	$	(0.08)	$	(0.04)	$	(0.27)	$	(0.10)