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Net Loss Per Common Share
 9 Months Ended
Sep. 30, 2013
Net Loss Per Common Share  
Net Loss Per Common Share

7.   Net Loss Per Common Share

 

Basic earnings (loss) per share is calculated using the two-class method, which is an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares and holders of the Series B preferred stock.  The Series B preferred stock shares contain participation rights in undistributed earnings, but do not share in the losses of the Company.  The dividends on the Series B preferred stock are treated as a reduction of earnings attributable to common shareholders.

 

The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method:

 

 

 

Quarter Ended September 30,

 

Nine Months Ended September 30,

 

(Amounts in thousands except per share amounts)

 

2012

 

2013

 

2012

 

2013

 

Numerator:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(6,034

)

$

(2,273

)

$

(22,824

)

$

(12,706

)

Less: earnings attributable to convertible preferred stock

 

1,218

 

1,368

 

2,738

 

3,945

 

Numerator of basic and diluted EPS

 

$

(7,252

)

$

(3,641

)

$

(25,562

)

$

(16,651

)

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Denominator for basic and diluted EPS: weighted-average common shares outstanding

 

43,336

 

60,847

 

40,331

 

50,517

 

Net loss per share attributable to common shareholders (basic and diluted)

 

$

(0.17

)

$

(0.06

)

$

(0.63

)

$

(0.33

)

 

Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive.  The aggregate number of common equivalent shares (related to options, warrants and preferred stock) that have been excluded from the computations of diluted net loss per common share at September 30, 2012 and 2013 were 29,260,000 and 48,671,000, respectively.

 

Net loss per share attributable to common shareholders (Basic and Diluted) during the quarter and six months ended June 30, 2013 should have been $(0.14) and $(0.29), respectively, as compared to the as reported amounts of $(0.11) and $(0.26).  During the quarter ended June 30, 2013, the Company did not adjust earnings attributable to common shareholders for the undeclared dividends that accumulated on the Series B preferred stock.  The Company evaluated this error and, based on an analysis of quantitative and qualitative factors determined that the error was immaterial to the prior reporting periods.