Note 10 – Stockholders’ Deficit and Loss Per Share

The following table presents the calculation of loss per share for the three and nine months ended September 30, 2019 and 2018:

	Three months ended September 30				Nine months ended September 30
In thousands, except per share data	2019		2018		2019		2018
Numerator:
Net loss, as reported	$	(277)	$	(3,080)	$	(1,165)	$	(4,048)
Change in dividends accumulated on preferred shares		(2)		(50)		(40)		(149)
Net loss attributable to common shares	$	(279)	$	(3,130)		(1,205)	$	(4,197)
Denominator:
Weighted average shares outstanding		13,650		2,289		10,648		2,232
Basic and diluted loss per share	$	(0.02)	$	(1.37)	$	(0.11)	$	(1.88)

Basic loss per common share is computed by dividing net loss attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted loss per common share is computed by dividing net loss attributable to common shares, by the weighted average number of common shares outstanding, adjusted for shares that would be assumed outstanding after warrants and stock options vested under the treasury stock method.

At September 30, 2019, the Company had no accumulated unpaid dividends related to the Series B Convertible Preferred Stock (“SBCPS”). At September 30, 2018, the Company had accumulated unpaid dividends $91,000 related to the SBCPS.

As of September 30, 2019, the Company had no shares of SBCPS outstanding. As of September 30, 2018, the Company had 16,512 shares of SBCPS outstanding, which were convertible into 330,240 shares of Common Stock, none of which were used in the calculation of diluted loss per share because their conversion price was greater than the average share price for the period and their inclusion would have been anti-dilutive.

On January 28, 2019, the Company filed an Amended and Restated Certificate of Designation of SBCPS with the Delaware Secretary of State to reduce the conversion price of the Company’s Series B Convertible Preferred Stock from $10.00 per share to $2.00 per share. This changed the conversion rate from 20 shares of Common Stock for every share of SBCPS to 100 shares of Common Stock for every share of SBCPS.

Prior to March 2019, the Company had 16,512 shares of SBCPS outstanding, which were convertible into an aggregate of 1,651,200 shares of Common Stock. For each holder of the 15,864 shares of SBCPS that converted their shares into Common Stock in March 2019, the Company declared a dividend of $4.60 per share of SBCPS on March 29, 2019, aggregating $73,000, which was distributed to these former holders of the SBCPS on April 2, 2019. For a holder of 151 shares of SBCPS that converted its shares into Common Stock in August 2019, the Company declared a dividend of $9.50 per share of SBCPS on August 8, 2019, aggregating $1,000, which was distributed to this former holder of the SBCPS on August 8, 2019. On August 9, 2019, the Company notified the holders of the remaining 497 shares of SBCPS that it was exercising its mandatory conversion right on the SBCPS. As a result, each remaining outstanding share of SBCPS was converted into 100 shares of Common Stock on September 12, 2019. The Company declared a dividend of $11.00 per share of SBCPS on September 9, 2019, aggregating $6,000, which was distributed to these former holders of the SBCPS on September 12, 2019.

As of September 30, 2019, the Company had warrants to purchase 250,000 shares of Common Stock outstanding, which were included in the calculation of diluted loss per share because their exercise price was less than the average share price of our Common Stock for the period, so their inclusion was dilutive. As of September 30, 2019 and 2018, the Company had other warrants to purchase 10,000 and 52,000 shares, respectively, of Common Stock outstanding, which were excluded from the calculation of diluted loss per share because their exercise price was greater than the average share price for the period, so their inclusion would have been anti-dilutive. The remaining warrants to purchase 10,000 shares as of September 30, 2019 could be dilutive in the future if the average share price increases and is greater than the exercise price of these warrants.

On February 5, 2019, the Company commenced a Rights Offering to current shareholders under which the shareholders could purchase shares of our Common Stock at an exercise price of $1.00 per share. On April 5, 2019, the Company completed its Rights Offering and accepted subscriptions for a total of 2,500,000 shares of its Common Stock, representing all of the shares offered, for aggregate gross proceeds to the Company of $2.5 million, less issuance costs of $72,000.