NOTE 3 – (LOSS) INCOME PER SHARE

Basic (loss) income per common share is based only on the average number of shares of Common Stock outstanding for the periods. Diluted (loss) income per common share reflects the effect of shares of Common Stock issuable upon the exercise of options, unless the effect on earnings is anti-dilutive.

Diluted (loss) income per common share is computed using the treasury stock method. Under this method, the aggregate number of shares of Common Stock outstanding reflects the assumed use of proceeds from the hypothetical exercise of any outstanding options to purchase shares of Common Stock. The average market value for the period is used as the assumed purchase price.

The following table sets forth the elements of basic and diluted (loss) income per common share:


	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerator for basic and diluted loss per common share:
Net (loss) income	$	(2,381,000)	$	5,688,000	$	(3,139,000)	$	5,662,000

Denominator:
Denominator for basic (loss) earnings per share - weighted average common shares outstanding		3,148,000		3,163,000		3,146,000		3,271,000
Dilutive securities (1)		—		67,000		—		66,000
Denominator for diluted (loss) income per share - weighted average common shares outstanding		3,148,000		3,230,000		3,146,000		3,337,000

(1)

Dilutive securities consist of “in the money” stock options. In the event of a loss, options are considered anti-dilutive and therefore not included in the calculation of diluted loss per share.

At June 30, 2020 and 2019, there were outstanding stock options whose exercise prices were higher than the average market values of the underlying Common Stock for the period. The weighted average of anti-dilutive stock options outstanding was as follows:


	Three months ended		Six months ended
	June 30,		June 30,
	2020	2019	2020	2019
Weighted average anti-dilutive stock options outstanding	186,000	8,000	166,000	8,000