4. LOSS PER SHARE

The Company computes basic income (loss) per share using the weighted average number of common shares outstanding. The Company has two categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the registered direct offering and shares issuable upon exercise of options. We compute diluted earnings per share using the if-converted method for preferred stock and the treasury stock method for stock options, respectively. Shares issuable upon exercise of 712 stock options and 12 common shares issuable upon conversion of preferred shares were not considered in computing diluted income (loss) per share for the year ended September 30, 2020, because they were anti-dilutive. Shares issuable upon exercise of 776 stock options and 17 common shares issuable upon conversion of preferred shares were not considered in computing diluted income (loss) per share for the year ended September 30, 2019, because they were anti-dilutive.

Computation of basic net loss per share is shown in the following table:


	Years Ended September 30,
	2020		2019
Basic net (loss) per share:
Net loss applicable to common shareholders	$	(4,685)	$	(790)
Weighted average common shares outstanding		10,851		10,383
Basic net loss per share	$	(0.43)	$	(0.08)

For purposes of the diluted net income (loss) per share calculation, stock options and Series A preferred shares are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. These common stock equivalents were excluded from the determination of diluted net loss per share in fiscal 2020 due to their anti-dilutive effect on earnings.