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 and six months ended January 31, 2021, approximately 47,000 and 23,000 weighted average stock options respectively were included in the calculation of diluted weighted average shares outstanding. As a result of the net loss for the three and six months ended January 31, 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, unearned performance stock units and unvested restricted stock because to do so would be antidilutive. For the three and six months ended January 31, 2020, approximately zero and 64,000 of potential common shares (“in the money options”) and unvested restricted stock respectively, were excluded from the calculation of diluted earnings per share.

For the three and six months ended January 31, 2021, the effect of approximately 2,264,000 and 2,122,000 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. For the three and six months ended January 31, 2020, the effect of approximately 1,897,000 and 1,606,000 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.