Note 2 – Net income (loss) per share

Basic net income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. As a result of the net loss for the three months ended April 30, 2020 and nine months ended April 30, 2020 diluted weighted average shares outstanding are the same as basic weighted average shares outstanding, and do not include the potential common shares from stock options and unvested restricted stock because to do so would be antidilutive. For the three and nine months ended April 30, 2020, approximately 40,000 and 56,000, respectively of potential common shares (“in the money options”) and unvested restricted stock were excluded from the calculation of diluted earnings per share. For the three and nine months ended April 30, 2020, the effect of approximately 2,201,000 and 1,805,000 of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted earnings per share because their effect would be antidilutive.

For the three and nine months ended April 30, 2019, the effect of approximately 1,640,000 and 1,541,000 of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted net income per share because their effect would be anti-dilutive.