Net Loss Per Common Share (Policies)
|9 Months Ended|
Oct. 31, 2020
|Earnings Per Share [Abstract]|
|Net Loss Per Common Share||
Net Loss Per Common Share
During fiscal 2018, the Company issued a restricted stock award that meets the criteria of a participating security. Accordingly, basic income (loss) per share is computed using the two-class method under which earnings are allocated to both common shares and participating securities. Undistributed net losses are allocated entirely to common shareholders since the participating security has no contractual obligation to share in the losses. All shares of restricted stock are deducted from weighted-average number of common shares outstanding – basic. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during reported periods and is calculated using the treasury method.
A reconciliation of net loss per share calculations and the number of shares used in the calculation of basic loss per share and diluted loss per share is as follows:
(a) During fiscal 2018, the Company issued a restricted stock award that is a participating security. For the three and nine-month periods ended October 31, 2020 and November 2, 2019, the entire undistributed loss is allocated to common shareholders.
(b) For the three and nine-month periods ended October 31, 2020, the basic earnings per share computation included 55,000 and 28,000 outstanding fully-paid warrants to purchase shares of the Company's common stock at a price of $0.001 per share.
(c) For the three and nine-month periods ended October 31, 2020, there were 992,000 and 476,000 incremental in-the-money potentially dilutive common shares outstanding, and 75,000 and 40,000 for the three and nine-month periods ended November 2, 2019. The incremental in-the-money potentially dilutive common stock shares are excluded from the computation of diluted earnings per share, as the effect of their inclusion would be anti-dilutive.
Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef