Basic net loss per share excludes the effect of dilution and is computed by dividing net loss by the weighted-average number of shares outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised into shares. In calculating diluted net loss per share, the numerator is adjusted for the change in the fair value of the warrant liability (only if dilutive) and the denominator is increased to include the number of potentially dilutive common shares assumed to be outstanding during the period using the treasury stock method.

 

The following table sets forth the reconciliation of the numerator and denominator used in the computation of basic and diluted net loss per common share for the three months ended March 31, 2018 and 2017: 

 

		Three months ended March 31,
(in thousands, except per share amounts)		2018			2017
Numerator:
Net loss used for basic earnings per share		$	(2,605)		$	(3,005)
Less change in fair value of warrant liability			—			(422)
Net loss used for diluted earnings per share		$	(2,605)		$	(3,427)
Denominator:
Basic weighted-average outstanding common shares			21,204			21,199
Effect of dilutive potential common shares resulting from options			—			45
Effect of dilutive potential common shares resulting from warrants			—			132
Weighted-average shares outstanding—diluted			21,204			21,376
Net loss per common share:
Basic		$	(0.12)		$	(0.14)
Diluted		$	(0.12)		$	(0.16)

 

The table below presents common shares underlying stock options and warrants that are excluded from the calculation of the weighted average number of common shares outstanding used for the calculation of diluted net loss per common share. These are excluded from the calculation due to their anti-dilutive effect for the three months ended March 31, 2018 and 2017:

 

		Three months ended  March 31,
(in thousands)		2018			2017
Weighted-average anti-dilutive common shares resulting from options			2,991			1,913
Weighted-average anti-dilutive common shares resulting from warrants			2,044			246
			5,035			2,159