NOTE 3. NET LOSS PER SHARE

Basic net loss per share is based upon the weighted average number of common shares outstanding. This calculation includes the weighted average number of Series B Convertible Preferred shares outstanding also as they are deemed to be substantially similar to the common shares and shareholders are entitled to the same liquidation and dividend rights. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the year ended June 30, 2025, the Company excluded 343,667 shares related to outstanding stock options, 193,857 shares related to outstanding restricted stock awards and 82,500 shares related to outstanding warrants, and for the year ended June 30, 2024, the Company excluded 540,881 shares related to outstanding stock options, 681,315 shares related to outstanding restricted stock awards and 82,500 shares related to outstanding warrants, respectively, from the diluted net loss per share calculation as their effect would be anti-dilutive. Since the Company generated a net loss in both fiscal 2025 and 2024, basic and diluted net loss per share were the same.

The components of basic and diluted net loss per share were as follows (in thousands, except per share data):

 SCHEDULE OF COMPONENTS OF BASIC AND DILUTED EARNINGS PER SHARE