Earnings per Share

6 Months Ended

Jun. 30, 2020

Note 12 — Earnings (Loss) Per Share

The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock that shared in earnings.

The following table presents the basic and diluted loss per share calculations for the three and six months ended June 30, 2020:

	Three Months Ended			Six Months Ended
	June 30, 2020			June 30, 2020
	(In thousands, except share and per share data)
Basic EPS:
Net income	$	2,141		$	4,720
Less deemed dividends on preferred stock		48,955			48,955
Net loss allocated to common stock	$	(46,814	)	$	(44,235	)
Less earnings allocated to participating securities		—			—
Net loss allocated to common stock	$	(46,814	)	$	(44,235	)
Weighted average common shares outstanding		20,087			20,087
Basic loss per common share	$	(2.33	)	$	(2.20	)
Diluted EPS:
Net loss allocated to common shareholders	$	(46,814	)	$	(44,235	)
Weighted average common shares outstanding		20,087			20,087
Add dilutive effects for assumed conversion of Series A preferred stock		—			—
Add dilutive effects for warrants		—			—
Add dilutive effects for stock options		—			—
Weighted average diluted common shares outstanding		20,087			20,087
Diluted loss per common share	$	(2.33	)	$	(2.20	)

Earnings per common share is not applicable to periods prior to the Company's IPO on January 17, 2020.

The following table sets forth the number of shares excluded from the computation of diluted loss per share, as their inclusion would have been anti-dilutive:

	Three Months Ended		Six Months Ended
	June 30, 2020		June 30, 2020
Shares underlying Series A Convertible Preferred Stock		11,688,312		11,688,312
Shares underlying warrants		3,013,125		3,013,125
Stock options		772,500		772,500
Share equivalents excluded from EPS		15,473,937		15,473,937