NOTE 14. EARNINGS PER SHARE

The two-class method is utilized to compute earnings per common share (“EPS”) as our unvested restricted stock awards with non-forfeitable dividends are considered participating securities. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. Our unvested restricted stock is not obligated to absorb Company losses and accordingly is not allocated losses. The following is a reconciliation of basic and diluted EPS:


	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Numerator: Basic
Net earnings (loss) attributable to common shareholders	$	(2,123)	$	2,513	$	(3,660)	$	5,896
Less: Allocation to participating securities		-		(17)		(28)		(52)
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	$	(2,123)	$	2,496	$	(3,688)	$	5,844

Numerator: Diluted
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	$	(2,123)	$	2,496	$	(3,688)	$	5,844
Interest and fair value adjustment on Convertible Debt		-		15		-		28
Total Diluted	$	(2,123)	$	2,511	$	(3,688)	$	5,872

Denominator
Weighted average number of common shares - Basic		11,862,204		11,800,908		11,842,746		11,776,591
Performance Based Share Awards		-		-		-		5,714
Convertible Debt		-		97,269		-		97,269
Weighted average number of common shares - Diluted		11,862,204		11,898,177		11,842,746		11,879,574

Earnings per Share
Basic Earnings (Loss) per Share	$	(0.18)	$	0.21	$	(0.31)	$	0.50
Diluted Earnings (Loss) per Share	$	(0.18)	$	0.21	$	(0.31)	$	0.49

The following table summarizes the weighted average number of potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted EPS as they are antidilutive:


	Three months ended September 30,		Nine months ended September 30,
	2019	2018	2019	2018
Unvested restricted stock	52,847	82,865	67,149	91,398
Warrants - Employees (2)	-	-	-	14,781
Series E Preferred Stock	668,111	668,111	668,111	668,111
Convertible debt	97,269	-	97,269	-
Operating partnership common units (1)	57,740	91,496	59,190	91,210
Total potentially dilutive securities excluded from the denominator	875,967	842,472	891,719	865,500

(1)

Common units of the operating partnership have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS.

(2)

Amounts above are weighted average amounts outstanding for the periods presented. These instruments were no longer outstanding at September 30, 2019.