For the three and six months ended June 30, 2020 and 2019, basic net income (loss) per common share are calculated using the two-class method required for participating securities which includes 1,016,000 Series 1 Preferred Shares as a separate class for the respective periods (three and six months ended June 30, 2019 – 1,016,000). The convertible 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 three and six months ended June 30, 2020, 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 three months ended June 30, 2019, 2,658,217 stock options and all warrants and convertible preferred shares were excluded from the calculation of diluted net loss per common share as their inclusion would be anti-dilutive. For the six months ended June 30, 2019, 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.

The following table sets out the computation of basic and diluted net loss per common share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Numerator:
Allocation of loss attributed to shareholders
Basic	$	(170	)	$	(9,627	)	$	(7,437	)	$	(20,538	)
Adjustment for change in fair value of liability classified stock options		—			(5	)		—			—
	$	(170	)	$	(9,632	)	$	(7,437	)	$	(20,538	)
Denominator:
Weighted average number of shares:
Basic		34,979,282			25,773,879			34,084,508			25,763,858
Adjustment for dilutive effect of stock options		—			1,680			—			—
Diluted		34,979,282			25,775,559			34,084,508			25,763,858
Net loss attributable to shareholders per share - basic	$	(0.00	)	$	(0.37	)	$	(0.22	)	$	(0.80	)
Net loss attributable to shareholders per share - diluted	$	(0.00	)	$	(0.37	)	$	(0.22	)	$	(0.80	)