Basic net income (loss) per common share is calculated using the two-class method required for participating securities which includes the convertible preferred shares as a separate class. The preferred shares entitle the holders to participate in dividends and in earnings and losses of the Company on an equivalent basis as common shares. Accordingly, undistributed earnings (losses) are allocated to common shares and participating preferred shares based on the weighted-average shares of each class outstanding during the period.

The treasury stock method is used to compute the dilutive effect of the Company’s stock options and warrants. Under this method, the incremental number of common shares used in computing diluted net income (loss) per common share is the difference between the number of common shares assumed issued and purchased using assumed proceeds.

The if-converted method is used to compute the dilutive effect of the Company’s convertible preferred shares. Under the if-converted method, dividends on the preferred shares, if applicable, are added back to earnings attributable to common shareholders, and the preferred shares and paid-in kind dividends are assumed to have been converted at the share price applicable at the end of the period. The if-converted method is applied only if the effect is dilutive.

For the year ended December 31, 2018, all stock options, warrants and convertible preferred shares were anti-dilutive and were excluded from the diluted weighted average common shares outstanding for the period. For the year ended December 31, 2017, 2,172,034 stock options and warrants were excluded from the calculation of diluted net loss per common share as their inclusion would be anti-dilutive. No convertible preferred shares were outstanding for the year ended December 31, 2017.

The following is a reconciliation of the numerators and denominators of basic and diluted net loss per common share and preferred share:

	Year Ended December 31,
	2018						2017
Numerator:	Common Shares			Preferred Shares			Common Shares			Preferred Shares
Allocation of loss used attributed to shareholders:
Basic	$	(31,616	)	$	(2,881	)	$	(30,704	)	$	—
Adjustment for change in fair value of liability classified stock options		—			—			(187	)		—
Diluted	$	(31,616	)	$	(2,881	)	$	(30,891	)	$	—
Denominator:
Weighted average number of shares:
Basic		19,425,711			1,769,900			17,985,061			—
Adjustment for dilutive effect of stock options		—			—			16,698			—
Diluted		19,425,711			1,769,900			18,001,759			—
Net loss attributable to shareholders per share - basic	$	(1.63	)	$	(1.63	)	$	(1.71	)	$	—
Net loss attributable to shareholders per share - diluted	$	(1.63	)	$	(1.63	)	$	(1.72	)	$	—