Earnings (Loss) Per Common Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER COMMON SHARE

Note 11 - Earnings (Loss) Per Common Share

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

	Year Ended December 31,
(in thousands, except per share amounts)	2019		2018
Net income attributable to controlling interests before preferred shares	$	1,097	$	8,404
Less: beneficial conversion feature		-		1,125
Less: net income attributable to preferred shares – preferred return		300		224
Net income attributable to common stockholders, basic		797		7,055
Less: warrant derivative gain		-		225
Net income attributable to common stockholders, diluted	$	797	$	6,830
Weighted-average number of common shares outstanding, basic		7,794		7,525
Add dilutive effects of non-vested shares of restricted stock and restricted performance units		301		314
Weighted-average number of common shares outstanding, diluted		8,095		7,839
Net income per common share, basic	$	0.10	$	0.94
Net income per common share, diluted	$	0.10	$	0.87

For the years ended December 31, 2019 and 2018, approximately 275,000 and 280,000 restricted performance units subject to future contingencies were excluded from the computation of basic and diluted earnings per share.

Series B Convertible Preferred Stock – Related Party

In connection with the closing of the Seneca Acquisition, we raised $5.0 million through the issuance of 50,000 shares of Series B Convertible Preferred Stock, par value $0.01 per share ("Preferred Stock") to Yorktown. The Preferred Stock converts into common stock at the election of the holder or will automatically convert into shares of our common stock upon completion of a qualifying equity financing event. The number of shares of common stock issuable upon conversion is dependent upon the price per share of common stock issued in connection with any such qualifying equity financing but has a floor conversion price equal to $8.00 per share. The conversion ratio at which the Preferred Stock will convert into common stock is equal to an amount per share of $100 plus all accrued but unpaid dividends payable in respect thereof divided by the greater of $8.00 per share or the price that is 15.0% less than the lowest price per share of shares sold to the public in the next equity financing. Using the floor of $8.00 per share would yield 12.5 shares of common stock for every unit of Preferred Stock. The conversion price will be proportionately increased or decreased to reflect changes to the outstanding shares of common stock, such as the result of a combination, reclassification, subdivision, stock split, stock dividend or other similar transaction involving the common stock. Additionally, after the third anniversary of the issuance of the Preferred Stock, we have the option to redeem the shares for cash.

The Preferred Stock accrues cash dividends at a rate of 6.0% of the initial issue price of $100 per share per annum. The holders of the Preferred Stock are entitled to the same number of votes of common stock that such share of Preferred Stock would represent on an as converted basis. The holders of the Preferred Stock receive liquidation preference based on the initial issue price of $100 per share plus a preferred return over common stockholders and the holders of any junior ranking stock. The preferred return was approximately $524,000 and $224,000 as of December 31, 2019 and 2018, respectively.