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. For the three months ended October 31, 2020, approximately 10,000 weighted average stock options were included in the calculation of diluted weighted average shares outstanding. As a result of the net loss for the three months ended October 31, 2019, 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, unearned performance stock units and unvested restricted stock because to do so would be antidilutive. For the three months ended October 31, 2019, approximately 127,000 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 months ended October 31, 2020 and 2019, the effect of approximately 2,146,000 and 1,319,000 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.